Compiled by: Yuliya, PANews
Editor's Note : On April 23, at the 2026 Hong Kong Institutional Digital Wealth Management Summit, Fu Peng, the newly appointed Chief Economist of Newfire Group, delivered his debut speech. He stated that the essence of traditional finance veterans embracing the crypto world is similar to how computer technology reshaped traditional finance in the past; now, AI and blockchain are driving a new round of transformation. In the future, traditional finance and crypto assets will fully integrate, moving towards a new era of "FICC+C". The full text of his speech is below:
In the past few days, many people have been asking me the same question: Why am I so close to the crypto?
In fact, this opportunity began around 2022, and it has been about four years since then. As practitioners in the traditional financial sector, we have been closely monitoring and tracking the trends of the entire crypto asset market.
My initial intention in giving this speech today is quite simple: I just want to tell you a historical story. For me, I was a major beneficiary of the dividends of the last era. You may see my title as "economist," but I am not a purely academic.
My core experience over the past 25 years, which is also the core business we've been doing, is what people understand as traditional hedge funds. You might be wondering why these traditional capital, traditional financial people and funds are starting to pay attention to crypto assets?
For the past year or so, I've repeatedly emphasized that the future will definitely be "FICC+C," meaning that traditional asset allocation (FICC) will be supplemented with crypto assets. Many people want to know why, so I'd like to take this opportunity to share my simple thoughts. Once you understand this logic, you'll likely already have your own answers about what the market will do and how asset prices will move.
Today, I'll help you break down this barrier. We need to rewind to the origins of the FICC asset classes—roughly the late 1970s and early 1980s. Over the past decade, everyone here has clearly recognized the tremendous changes taking place in the overall framework and structure of our world. And this change most closely resembles the period after World War II—the 1970s and 80s. For example, Mr. Xiao Feng just mentioned artificial intelligence, and all the guests have mentioned the integration of AI. As a significant technological advancement and productive force, each leap in technology and productivity reshapes various industries.
The phrase "all industries" here encompasses all business sectors, naturally including the financial sector. Finance is not static. It's definitely not what you see in movies and TV shows like "The Greed of Man" or "The Wolf of Wall Street"—traders in vests loudly shill on the floor. In other words, many people visiting the NYSE might still think finance is simply about people quoting and trading on the floor. Indeed, many journalists still like to use images of floor trading as background for their news reports. If you go to Chicago, to the earliest interest rate derivatives market, or to the London Metal Exchange (LME), you can still see traces of this history. Yes, that was the most traditional form of finance before the 1960s and 70s. People wore vests to quote prices, and used typewriters and hole punchers to complete transfers, transactions, and payments.
For most people in the Chinese-speaking world, the image of trading might still be of sitting in a stock trading hall, watching a ticker machine, filling out a form, inserting it into the counter, and then having a staff member call the exchange via a dedicated telephone line to complete the transaction. But not all finance or trading remains in that era . The biggest changes in the financial field inevitably occur alongside technological advancements.
In the previous cycle of technological advancement, productivity and technological progress, centered on semiconductors, computers, personal computers, DOS systems, and Windows, reshaped the financial landscape in the late 1970s and early 1980s. The FICC (Fixed Income, Currencies, and Commodities) asset classes that we are familiar with today, simply put, integrate financial assets such as interest rates, commodities, exchange rates, and stocks. FICC emerged in the early 1980s. In the 1970s, everyone learned about the pricing of financial derivatives, such as the Black-Scholes model for option pricing, in school. But imagine if, without the widespread application and adoption of computers, the quotation and pricing of a financial derivative or asset would have required tens of minutes, even half an hour, of manual calculation. How could we possibly efficiently complete quotations and trades under such circumstances?
Since 1985, professional investors and investment institutions have only begun to widely use Bloomberg terminals. I myself only started using Reuters 3000, and later Reuters Extra and Eikon, around the time of the Asian financial crisis in 1997 and 1998. In other words, it was the advent of the computer, semiconductor, information technology, and data age that gave rise to FICC (Fixed Income, Currencies, and Commodities). This has resulted in a richer array of asset classes, asset consolidation, cross-asset trading, hedge funds, algorithmic trading, and the well-known "Medal of Fame" funds. Without this advancement in productivity, finance might still be stuck in the era of traders acting as market manipulators and issuing trading shill, as many people perceive it.
During that period, JP Morgan Chase on Wall Street became the biggest leader in the entire financial derivatives market. At that time, JP Morgan Chase hired Blythe Masters, a Cambridge graduate, who became the founder of the entire financial derivatives market and the FICC market, and turned the FICC business into the most profitable part of mainstream financial institutions on Wall Street.
Of course, all of this is inseparable from the turmoil of the world in the 1970s and 80s. Everyone should remember this: the origin of technological progress is often also the origin of global turmoil . In a specific historical period, technological leaps always coexist with upheavals in world systems and order.
In the 1970s and 80s, we experienced the Cold War, the Middle East wars, the dollar-oil crisis, the surge in gold prices, and systemic decoupling. However, the development of human civilization is always accompanied by both risks and opportunities.
While the world order appeared chaotic, our computers, semiconductors, and information technology were rapidly rising. I've joked before that there was a strange investment portfolio in that era: holding both "assets representing humanity's future" and "assets that hedge against humanity's lack of a future."
Think back to around 2019, let's not even talk about the past ten years. Look at your own investment portfolio. Have you also put assets that represent both "humanity's future" and "humanity has no future" into your portfolio today?
Today, as we all begin to realize that AI, data, and computing power will become the most important productive forces in the future and even the next era, our "game" is already halfway through. And this entire first half is what everyone recognizes as the traditional "crypto."
Why am I talking about this?
Everyone should remember that nothing is static; everything is constantly being reconstructed and reborn in the process of development .
So when we talk about entering this circle, that is, the moment of "FICC+C", I wonder if this will leave an important mark on history, just like the mark left by JPMorgan Chase's Blythe Masters in the history of FICC. Could this be a significant turning point, announcing the end of the early development phase of the past 10 to 15 years and the arrival of a completely new development phase?
During the transition between these two phases, investors, participants, market systems, and the rules of the game will undergo tremendous changes, or rather, these changes are already happening. That's why I mentioned in the interview earlier that the paradigms and ways of thinking that you've become very familiar with over the past 10 to 15 years may undergo disruptive changes in the future.
If you have enough years of experience in traditional finance, you can actually foresee what's coming. Just like in China back then, we had large-scale exchanges established by provincial financial offices, holding a vast amount of financial assets. But as compliance and regulation gradually strengthened, simply put, it was survival of the fittest; the remaining high-quality assets were gradually incorporated into the asset portfolios of financial institutions. Our entire crypto asset market is actually undergoing the same process.
For example, people are now used to trading commodities, but you should know that before the 1980s, financial derivatives of commodities were not popular at all, and most people could not trade them in a real sense.
- People now consider trading assets such as copper, aluminum, lead, zinc, and palm oil to be commonplace, but this was not the case back then.
- People find it very convenient to trade exchange rates now, something that didn't exist back then;
- Now we can easily trade government bonds and interest rate futures, which wasn't possible back then.
Does this feeling resemble that of 2009 when we first encountered stock index futures, options, and other derivatives? If you have this feeling, you'll understand that we are now at the same historical juncture. Back then, technological advancements propelled the transformation and integration of traditional finance with FICC (Fixed Income, Currencies, and Commodities). The same principle applies today, with data and computing power becoming the driving forces behind it all.
Artificial intelligence, coupled with underlying encryption or blockchain technologies, is reshaping finance with technology at its core. Our financial industry is undergoing profound changes, so we've been closely monitoring this area. But frankly, we wouldn't have participated before, not at all. I often joke that in the early stages, this circle does need a bit of "faith," a bit of so-called "fundamentalism." But real capital won't excessively participate in this kind of "faith trading" in the early stages. Capital will only be incorporated into the asset management framework when the market has gradually matured and gained certainty.
For example, in the past, when the market traded red beans or mung beans, would you think large financial institutions would include these as part of their asset allocation? Impossible. But today, we can make copper into futures and options, we can make it into ETFs, and we can include it in our entire investment portfolio. This process of becoming more formalized and financialized is actually something the entire crypto asset ecosystem is currently experiencing, and the situation is very similar.
2022 marked my first real interaction with the big names in this industry, a kind of fate . It all started with a comment I made during an interview in 2021, when Bitcoin was priced around $70,000. When the reporter asked for my opinion, I, being a straightforward person, simply stated: "Using the traditional financial framework, we genuinely can't understand what this type of asset truly is. We don't subscribe to the concepts of faith you're talking about; we have our own way of interpreting things. For example, regarding its value-maintaining function, we'll use the framework and language of traditional finance to interpret it." At that time, I felt it wasn't the right time for us to get involved with this type of asset.
I said at the time that we were indeed observing, but I still didn't quite understand the logic you were talking about, and my understanding and valuation model weren't fully formed yet. However, I did have a feeling about it. The reporter asked me what that feeling was? My feeling stemmed from the fact that at that time, financial regulatory agencies such as the U.S. Commodity Futures Trading Commission (CFTC) had clearly defined it as a commodity, a tradable financial asset. For me, this was very simple; I could completely use this official definition to understand its asset attributes.
I also said something at the time, and I'd make a wild guess: if macro liquidity tightens significantly in 2022, it's easy to see overvalued assets in traditional asset classes experience a large-scale "valuation correction." If my understanding of crypto assets is correct, it will also follow the same valuation correction and liquidity tightening trend as traditional assets. I was guessing it would drop by half. That's why, later in 2022, when it actually fell to around $20,000, many people in the crypto came to me, because they suddenly realized: Has the era changed?
Over the past few years, I've found that many true leaders in the crypto are actually similar to the leaders in traditional finance in their early days. In the early stages of the industry, everyone's development methods were relatively crude. Think back to those big names in commodity futures trading in China in their early years—weren't they all growing rapidly and aggressively? Didn't they all have to "take a gamble and see their fortunes rise"? But those who truly succeed in the future are those who can quickly absorb new things and navigate the transition when it's time for a "turning point"—note, not a transformation, but a turning point. If you cling to the experiences of the early days, you'll basically be eliminated by the times. As the saying goes, "The times make you, and the times will eliminate you."
My personal observation is that 2025 to 2026 may be the time when the crypto asset field experiences this historic turning point. Back then, when everyone came to exchange ideas, it was actually very simple: mutual learning. You could tell me what you thought crypto assets were, and I would absorb and integrate that from a traditional financial perspective to re-understand this thing; at the same time, I would also tell you how we in traditional finance use existing paths and logic to understand these assets.
Over the past few years, through mutual tolerance and integration, a new system has been formed. From our perspective, the recent tightening of liquidity at the macro level, including at the end of last year, has led to valuation squeezes, and the crypto asset community has once again witnessed a story completely synchronized with traditional financial markets. What does this indicate? It shows that we are on the right path. Tolerance and integration will ultimately lead to a blurring of lines. Just like the traditional stock traders in "The Wolf of Wall Street" in the 70s and 80s, and those who later focused on FICC (Fixed Income, Currencies, and Commodities) asset allocation, they eventually became indistinguishable. Therefore, the future will definitely be the era of "FICC+C," where the boundaries between traditional finance and crypto assets will no longer be so clear.
Of course, for traditional financial institutions like ours, the most important thing is compliance. 2025 will be a crucial starting point. Whether it's the stablecoin bill or the definitive regulatory legislation concerning digital and crypto assets that we've seen, the progress of these important bills has already shown us the final answer for this market. At this point, the logic is simple: in the future, you will see Wall Street financial institutions and former traditional financial giants rapidly entering this market. Just like diversifying foreign exchange reserves, institutions will incorporate crypto assets as part of their diversified asset reserves, transforming them from single reserve or trading assets into diversified trading assets. In the past, we could add commodities, exchange rates, and interest rates; today, we can add crypto assets as well. Remember this: when this integration truly occurs, the underlying logic of the market will herald the arrival of a new era, and the old habits will become a thing of the past.
Looking back at history, since the 1980s, the proportion of direct retail investor participation in the US stock market has gradually decreased, while the proportion of financial institution participation has gradually increased. This institutionalization trend is also an inevitable stage in the transition of any market from its early stages to maturity. Has the crypto market reached this stage now? My answer is: yes. Stablecoins have already separated the payment function of crypto technology (or blockchain technology). So, everyone can think about what Bitcoin actually is.
A reporter just asked me whether Bitcoin is truly "digital gold." My next question might be a bit controversial. Why? Because it depends on the listener's level of understanding. For example, if you say "digital gold" to me, I immediately understand what you mean; but when you say this to an average investor, their first thought might be physical gold. So what exactly is gold? We can only give it a complete definition: it is a commodity asset that has a value-preserving function and is tradable.
Some assets, while possessing value-preserving properties, may not necessarily have the capacity for large-scale financialization or tradability. For example, do my youngest son's Air Jordan basketball shoes have any intrinsic value? Many people have a significant misunderstanding of the concept of "value." Furthermore, do the figurines or toys you buy have any value? Do the Richard Mille watches you buy have any value?
First, if "value" here refers to value in a broad sense, then there's nothing wrong with it; emotional value is value, and so is the value of companionship. However, do they possess the attributes of large-scale financialization and tradability? That's not necessarily true. Ask those "veterans" who like to collect and polish beads: is the wood in their hands valuable? Is the walnut valuable? Is the clivia valuable? If you say it has no value, that's definitely wrong, because under the broad definition of value, they certainly do have value; but if you're referring to value in the sense of being financialized and tradable, then saying they have value is also incorrect, because they don't possess that attribute.
Therefore, providing a complete and accurate definition for any asset is crucial. Currently, regulatory agencies have provided very clear standard definitions for crypto assets. The core path of Western financial development is clear: anything not prohibited by law is permitted. It encourages innovation and exploration. You do it first, just like how we developed financial derivatives in the past. Back then, everyone said, "My clients have a need for options, a need for swaps, but we don't have the market or the corresponding regulations. What do we do?" Just start doing it. After that, compliance follows step by step, allowing the market to mature gradually through layers of nesting. Therefore , the entire history of Western financial development is a process of "financial innovation – compliance following – entering maturity." Crypto assets follow the exact same logic.
So now you need to determine: by 2025, will a definitive answer regarding financial regulatory follow-up be available? My answer is: yes. In the future, you will see stablecoins as a product of blockchain technology applied to transactions and payments. And what will Bitcoin become? It will become an "asset with value preservation functions and capable of financial trading"—that is the most complete definition of it. Of course, I know this definition will certainly displease those with "fundamentalist" thinking from the previous era. But I want to tell you that this is the inevitability of the times, this is the entire evolutionary process that conforms to the framework of modern financial logic. At this stage, traditional Wall Street capital can fully intervene.
A new chapter is about to begin. I wonder if my speech today will go down in history? Of course, I hope it will, or at least spark some thought in everyone. I believe this answers the question many people have been asking: "Mr. Fu, why would you, a veteran of traditional FICC, cross over into such a new industry like ours?" What I want to say is: because your industry has matured to the point where it can be incorporated into traditional investment portfolios.
That's all for today, thank you!
