Speaker: Fu Peng, Chief Economist of New Fire Group
Organized by: Eric, Foresight News

On April 23, Beijing time, at the Hong Kong Web3 Carnival held at the Hong Kong Convention and Exhibition Centre, Fu Peng, Chief Economist of New Fire Group and a well-known domestic macroeconomist, delivered his first public speech about 2026. In this speech, Fu Peng publicly elaborated for the first time on his understanding of cryptocurrency assets and his interpretation of the status of cryptocurrency assets in the current macroeconomic environment.

The author has compiled all the content of Fu Peng's speech, with some deletions and modifications.

Many people have been crazily asking me these days why I am so closely associated with the cryptocurrency and cryptocurrency asset circles. In fact, this opportunity started around 2022, and it has been about four years already.

When I was in the traditional finance sector, I was also closely following and tracking the trends of the entire cryptocurrency asset market. Of course, today I am here to give this speech, which is very simple; I am just going to tell you a historical story because, for me, I actually belong to the main beneficiaries of the previous era's dividends. So, you might feel that my title is economist, but in reality, I am not a scholar. My real core experience over the past 25 years is in what we truly engage in, which is what you understand as traditional Hedge Funds.

You must be wondering why these traditional capital and traditional finance people or money have started to pay attention to it (cryptocurrency assets)?

In the past year, I mentioned that the future will definitely be **"FICC + C"**, meaning that major asset allocation will include cryptocurrency assets. Many people want to know why, so I just take this opportunity to briefly share this with you. If you understand the market well, regarding how asset prices move, you might already have the answers in your heart. So today, I will help you break through this layer of glass.

The sequence of time must tap into the origin of FICC major assets. When is this time? Roughly in the late 1970s to early 1980s, in fact, over the past decade, everyone here has been able to clearly recognize that the overall global framework and layout are undergoing tremendous changes, and this change is most similar to the historical point right after World War II, which is in the 1970s and 1980s.

For example, just now I saw Xiao Feng talking about artificial intelligence, and all the guests have mentioned the integration of AI. As an important technological advancement and productivity, each round of technological advancement and productivity improvement will reshape various industries. This includes all domains, and of course, it will inevitably encompass the financial sector. Our finance is not static; it absolutely is not.

If you look at movies or TV series like "The Big Era" or "The Wolf of Wall Street," they depict finance as being traders in vests shouting orders on the trading floor. Or when you go to the New York Stock Exchange, many people still think finance is where transactions happen on the floor. Of course, many journalists still like to use this trading floor backdrop for news reporting.

If you go to Chicago to see the earliest interest rate derivatives market or the London Metal Exchange, you will still see traces of history retained. That's right, that is the most traditional finance, you could say finance before the 1960s and 70s. People were wearing vests and quoting prices using typewriters and punch card machines to complete transaction payments. For most people in the Chinese-speaking world, their impression of trading is seeing the so-called display boards in stock halls, watching prices, filling out order forms, and handing them to clerks, with young women using dedicated phone lines to complete trades.

Not all finance or trading remains in that era; the biggest changes in finance have certainly occurred alongside technological advancements.

So, in the previous technological advancement cycle, the core representatives of productivity were semiconductors, computers, personal computers, DOS systems, Windows systems, etc. These technological advancements in the late 1970s and early 1980s restructured our finance's new form. The major asset trading we are familiar with today, simply put, is the integration of interest rates, commodities, exchange rates, stocks, and other financial assets.

And the time when FICC was born was in the early 1980s. In the 1970s, the pricing of financial derivatives, such as option pricing, the Black-Scholes model, etc., are things you all learned in school. But you can think about it; if it weren't for the large-scale application and popularization of computers, and if pricing a financial derivative or asset required ten minutes, twenty minutes, or even thirty minutes to calculate, how could I possibly complete the quoting and trading?

Starting in 1985, all of what we call professional investors and investment institutions began using Bloomberg terminals. I started using the then-Reuters 3000 during the Asian Financial Crisis in 1997 or 1998, followed by Reuters Xtra and then Eikon. In other words, computers, semiconductors, information technology, and data ushered in FICC.

We had categories of assets, fusion between assets, cross-asset trading, hedge funds, algorithmic trading, and well-known concepts like grand medals, etc. Without this advancement in productivity, finance would still be stuck in what many ordinary people think of, where traders in vests shout orders.

JP Morgan on Wall Street became the biggest leader in the entire financial derivatives market. At that time, JP Morgan hired the brilliant Cambridge graduate Blythe Masters, who became the architect of the entire financial derivatives market and turned the FICC business into the most profitable part of major Wall Street financial institutions. Of course, this is inseparable from the global turmoil of the 1970s and 1980s. Because remember one thing, the origin of technological advancement is simultaneously the origin of global turmoil.

So technological advancement at a certain stage coincides with the turmoil of global institutional orders. In the 1970s and 1980s, we experienced the Cold War, the Middle East wars, the oil crisis of the dollar, the so-called gold price surges, and systematic decoupling. But human civilization has always journeyed alongside opportunities and risks.

While one side experiences global disorder, our computers, semiconductors, and information technology are rising. I used to joke that during that time, there was a strange investment portfolio: simultaneously investing in "humanity has a future" and "humanity has no future."

You can consider that from a time not too long ago, around 2019, you can see that you probably held both "humanity has a future" and "humanity has no future" assets, but today they are both hard to obtain. Of course, to this day, when all of us start to realize that artificial intelligence, data, and computing power will become the most important productivity of the next era, the entire game has actually reached halftime.

And the whole first half represents what everyone recognizes as the traditional cryptocurrency space. Why am I saying this? Because remember, nothing is set in stone; everything is continuously reconstructed and reborn in the process of development.

So I had previously said that it is very possible that the moment I entered this circle may leave an important mark in history. Just like when Blythe Masters entered JP Morgan, could it become an important node?

(This node) signifies the end of the early development phase of the past 10 to 15 years and the arrival of a new development phase. In these two phases, investors, participants, market systems, and rules of the game will undergo significant changes. Or rather, they are already undergoing significant changes. Just now, when I was being interviewed by a reporter, I mentioned that many of the thinking paradigms you have become familiar with over the past 15 years, the paradigms you have been accustomed to for the past 10 or 15 years, may undergo enormous changes. Of course, if you have enough years of experience in traditional finance, you actually know exactly what is about to happen. Just like in China back then, we had a large number of trading venues set up by financial offices in various provinces, and we had a lot of financial assets. But as compliance gradually strengthens, to put it simply, it will be survival of the fittest.

Then, financial derivatives will gradually be integrated into the asset portfolios of financial institutions, and our entire cryptocurrency assets will also experience the same process. Now everyone may be accustomed to commodities, but you should know that before the 1980s, financial derivatives of commodities were not popular; most people couldn’t really trade them.

Now assets like copper, aluminum, lead, zinc, palm oil, etc. are seen as commonplace; today, people find it very convenient to trade exchange rates, but back then, you would realize it wasn't the case. We can easily trade government bonds and interest rate futures today, which also wasn't possible back then. In fact, doesn’t this feel similar to 2009, when we started having index futures, options, and derivatives?

If you have experienced it, you know this is the same point in time. Therefore, the technological advancements back then propelled the entire traditional finance toward the transformation and integration into FICC, and the same principle applies today: data, computing power, and artificial intelligence combined with underlying technology, which fundamentally is encryption technology or blockchain technology, are reconstructing finance, and our finance is undergoing changes.

So we have been paying attention, but honestly, we wouldn’t participate; not at all. So I jokingly said that in early stages, one really needs to talk about faith, to speak of so-called fundamentalism, right? Everyone has to have faith in this thing. But true capital will not overly participate in this faith trading in the early stages.

(Cryptocurrency) will only be incorporated into the asset management framework once it grows steadily and achieves certainty. For example, if we used to trade something like red beans or green beans, do you think large financial institutions would consider that as an asset class? Impossible, but today we can make copper into futures options, and we can create ETFs, integrating it into the entire investment portfolio.

This transformation actually illustrates the scene happening within the entire cryptocurrency ecosystem. 2022 was the first time I truly began to interact with some big shots in this space. The connection started in 2021, when I said a sentence during an interview. At that time, Bitcoin was around 70,000, but when the reporter asked me about it, I, being very straightforward, said simply that according to our path framework, we indeed could not grasp what this asset is.

Because all the faith-related things you were discussing were not recognized by us. We have our own way of interpreting it, such as regarding its value maintenance function; we would use our framework and language to interpret that.

(During the interview) I indicated that we haven't reached the time to engage with this asset. However, I said we are indeed observing it but still find what you are discussing quite unclear; my understanding and model of it (cryptocurrency assets) haven’t fully formed yet. But I mentioned that I have a sense; because at that time, the US CFTC (Commodity Futures Trading Commission) had clearly defined it as a commodity, a tradable financial asset. For me, I can simply utilize this definition to understand its attributes.

I made a guess then; I said that with the substantial tightening of liquidity in 2022, it would be easy for me to see valuation assets in our traditional asset circle experience a significant valuation kill. I said if my understanding of it is correct, it would experience the same valuation decline that valuation assets are facing. I guessed that Bitcoin would drop by half; this is later why at the end of 2022, when it fell to 20,000, many people from the cryptocurrency world approached me, because they suddenly realized maybe the era had changed.

Sure enough, after years of communication, many of what I think are the true leaders in the cryptocurrency world are similar to the traditional financial leaders of the past. In the early days, everyone was relatively crude. You can think about it; including the big names in China's commodity futures trading, in earlier years, who wasn’t rough, who didn’t need to gamble to turn a bicycle into a motorcycle? However, those who can truly achieve in the future are those who rapidly absorb when it is time to pivot, not transition, but to turn.

And those who continue to follow the old experiences will gradually be eliminated by the times. From my personal observation, 2025 or 2026 could be the pivotal point for cryptocurrency assets.

You can tell me what you think it (cryptocurrency asset) is, and I will also absorb and merge it from the perspective of traditional finance, and I will explain to you how to understand this type of asset based on our path logic. After a few years of integrating and merging, a new system has actually been formed.

And during these years, including the end of last year, from our perspective, it is just a new round of liquidity tightening that has led to valuation pressure. And the cryptocurrency circle has experienced the same story. What does this indicate? It indicates that the path we are on is correct. This inclusivity and integration will eventually lead to a point where traditional elements from the 1970s and 1980s,—the stock traders depicted in "The Wolf of Wall Street" behind the scenes and those handling major assets—will no longer be distinct.

So the future will definitely be **"FICC + C"**, with little distinction between you and me. Of course, for us, another crucial point is compliance, so 2025 is actually an important moment. Whether it is the stablecoin legislation or the clarity regarding digital assets or cryptocurrency assets legislation, these two important laws have actually provided us with the answers for this market. At this time it is simple; in the future, you will see the financial institutions of Wall Street, the once traditional financial institutions, rapidly entering this market. Just like diversified foreign reserves, it will include it as part of diversified asset reserves.

(Cryptocurrency) will transform from a single reserve asset or trading asset into a diversified trading asset. In the past, I could include commodities, exchange rates, and interest rates, but today I can also include cryptocurrency assets. But remember, when it integrates, the market logic will declare the arrival of a new era, rather than the habits of the old era. Of course, we say that after the 1980s, the proportion of retail investors in the US stock market has gradually decreased, meaning the proportion of retail investors directly participating in the market has been gradually decreasing, while the participation of financial institutions in the market has been gradually increasing. This will also happen in any market.

Is the phase from the early to mature stage an inevitable transition? My answer is yes. Stablecoins have separated the payment function of blockchain technology, so you can think about what Bitcoin really is. Just now a reporter asked me if it is really digital gold; I said this question is actually a bit controversial. Why?

Because it depends on the individual; for me, I might immediately understand what you are trying to convey. However, when you discuss this with an ordinary investor, their immediate reaction might be gold. So what is gold? It can only be defined as a tradable commodity asset with a value maintenance function—that's a complete definition. It can be said that some assets have value maintenance functions, but they may not necessarily possess what we refer to as large-scale financialization or tradability.

Let me give you a simple example: does my younger son's AJ basketball shoes have value? Regarding the understanding of value, many people will have a huge deviation. For example, do the figurines you buy have value? Does the Richard Mille you buy have value? First of all, if it is a broad value, that’s fine; emotional value can also be value, companionship value can also be value. But whether they possess large-scale financialization or tradability might not be true.

Now you might ask, does the wood you have have value? Do walnuts have value? Do orchids have value? You say they have no value—that’s incorrect, because if the definition is of a broad value, then to say they have no value is definitely wrong. You say they have value, and if it is financializable and tradable, conversely, that’s also incorrect because they may not be.

Thus, a complete definition for any asset is crucial.

The standard definition of cryptocurrency assets is now very clear. The development in Western society has a very clear core path. "If there is no prohibition in law, go ahead," so it encourages innovation and adventure. Just like our financial derivatives back in the day. Everyone says, "My clients have demand for options and swaps, but we don't have this market or regulation; what should we do?" "Just do it; once it's done, compliance will follow with layers of oversight to gradually mature." So Western finance is characterized by financial innovation followed by compliance, finally entering a mature phase.

Cryptocurrency follows the same logical framework. Now, what you need to predict is whether, by 2025, the financial regulation will catch up and whether a definitive answer has emerged. My answer is: yes. In the future, you will see that technology applications in payment will be stablecoins. So what will Bitcoin become? An asset with a value maintenance function that is financially tradable—that is its full meaning. Of course, I know this definition will certainly make fundamentalists of the past unhappy.

But I want to tell you that this is the era; there is no way around it; this is a complete system that aligns with logical frameworks. At this moment, Wall Street can fully intervene, and a new chapter is about to begin.

I don’t know if today’s speech will go down in history; of course, I hope it does, sparking thought among everyone. I believe (today's speech) can also answer many people's questions: Fu, an old capitalist in FICC, why is he in such a new industry? What I want to say is, you (cryptocurrency assets) have reached a stage of maturity where it can be included in investment portfolios.

Alright, I will share this with everyone; thank you.

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