Fu Peng’s Latest Speech: “My Journey with Crypto Began in 2022—We Are Now at a Historic Turning Point for the Industry”
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Fu Peng’s Latest Speech: “My Journey with Crypto Began in 2022—We Are Now at a Historic Turning Point for the Industry”
As a traditional finance professional with 25 years of experience, why do you believe the time has come to include crypto assets?
Navigating Web3 tides with focused insightsCompiled by: Yuliya, PANews
Over the past few days, many people have been frantically asking me one question: Why have I grown so close to the crypto industry?
In fact, this connection began around 2022—roughly four years ago. As a practitioner in traditional finance, we have been closely monitoring and tracking developments across the entire crypto-asset market.
My purpose in delivering this speech today is actually quite simple: I simply want to tell you a historical story. For me personally, I was one of the main beneficiaries of the previous era’s boom. You may see my title as “economist,” but I am not a pure academic.
Over the past 25 years, my core professional experience—and the central business we’ve consistently pursued—has been what you understand as traditional hedge funds. You’re surely wondering: why are traditional capital and traditional financial institutions now turning their attention toward crypto assets?
Over the past year and more, I have repeatedly emphasized one point: the future will undoubtedly be “FICC + C”—that is, traditional broad asset allocation (FICC) will incorporate crypto assets into its framework. Many people want to know why. I’m happy to take this opportunity to share a brief explanation with you. Once you grasp this logic, you’ll likely already have answers to questions like “Where is the market headed?” and “How will asset prices evolve?”
Today, I’ll help lift the veil on this matter. Let’s rewind time to the origins of FICC—the late 1970s and early 1980s. Over the past decade, everyone here has clearly perceived that the overall structure and landscape of our world is undergoing massive transformation. The period most analogous to today—since the end of World War II—is precisely the 1970s–1980s. For example, Mr. Xiao Feng just mentioned artificial intelligence (AI), and other speakers also highlighted AI integration. As a major technological advancement and productive force, every leap forward in technology and productivity reshapes every industry.
This “every industry” includes all sectors—and naturally, finance as well. Finance is not static. It is certainly not what you see portrayed in TV dramas like *The Greed of Man* or *The Wolf of Wall Street*, where traders in vests shout orders on the trading floor. Or perhaps when you visit the New York Stock Exchange, you might still imagine finance as traders shouting bids and offers on the floor. Indeed, many journalists still favor such floor-trading imagery as background visuals for news reports. If you go to Chicago—the birthplace of interest-rate derivatives—or to the London Metal Exchange (LME), you’ll still see traces of this history. Yes—that was traditional finance before the 1960s and ’70s: traders in vests quoting prices, using typewriters and punch-card machines to complete transfers, trades, and payments.
For most Chinese-speaking audiences, the image of trading may still be that of standing in a stock exchange hall watching price boards, filling out order slips, handing them over the counter, and having staff relay them via dedicated phone lines to the exchange for execution. Yet not all finance or trading remains stuck in that era. The biggest transformation in finance has always occurred alongside technological progress.
During the last wave of technological advancement—centered on semiconductors, computers, personal computers, DOS, Windows, and similar innovations—finance was restructured into new forms from the late 1970s through the early 1980s. Today’s widely recognized FICC asset-class trading—essentially integrating interest rates, commodities, foreign exchange, and equities—emerged precisely in the early 1980s. In the 1970s, foundational pricing models for financial derivatives—for instance, the Black-Scholes model for options—were already being taught in universities. But imagine this: without widespread computer adoption, manually calculating the price or quote for even a single derivative or financial instrument could take ten, twenty, or even thirty minutes. Under those conditions, how could efficient quoting and trade execution possibly occur?
From 1985 onward, professional investors and institutions began broadly adopting Bloomberg Terminals. I myself started using Reuters 3000—and later Reuters Extra and Eikon—around 1997–1998, during the Asian financial crisis.
In other words, it was precisely the arrival of computers, semiconductors, information technology, and the data age that gave rise to FICC. This enabled richer asset classes, cross-asset integration, multi-asset trading, hedge funds, algorithmic trading, and well-known funds like Renaissance Technologies’ Medallion Fund. Without such advances in productivity, finance might still remain in the public imagination as an era of floor traders in vests shouting orders.
At that time, JPMorgan Chase became the dominant force driving financial derivatives globally. JPMorgan hired Blythe Masters—a Cambridge graduate—who went on to become the architect of both the financial derivatives market and the FICC market, transforming FICC into the most profitable revenue segment for mainstream Wall Street institutions.
Of course, all this unfolded against the backdrop of global turbulence in the 1970s–1980s. Remember this: the origin of technological progress often coincides with the origin of global instability. At specific historical junctures, technological leaps invariably coexist with upheavals in global institutions and order.
In the 1970s–1980s, we experienced the Cold War, Middle East wars, the oil-dollar crisis, soaring gold prices, and systemic decoupling. Yet human civilization always advances hand-in-hand with risk and opportunity.
Amidst apparent global disorder, our computers, semiconductors, and information technologies surged forward. I once joked that there existed a peculiar investment portfolio in that era—one simultaneously holding “assets representing humanity’s future” and “assets hedging against humanity’s demise.”
Think back—not necessarily ten years, but roughly since 2019—and examine your own investment portfolio. Haven’t you likewise held both “humanity’s future” and “humanity’s demise” assets side-by-side until today?
Now, as we all begin recognizing that AI, data, and computing power will constitute the most critical productive forces of the future—and indeed, of the next era—this “game” is already halfway through. And the first half of this game is precisely what you know as the traditional “crypto industry.”
Why am I telling you all this?
Remember this: nothing remains unchanged; everything continuously reconstructs and renews itself through development.
So, when we speak of entering this space—of reaching the “FICC + C” moment—I don’t know whether it will leave a significant mark in history, akin to Blythe Masters’ legacy in FICC history at JPMorgan. Will this become a pivotal node marking the end of the early developmental phase of the past 10–15 years—and the beginning of an entirely new stage?
Across this transition between two phases, investors, participants, market institutions, and the rules of the game will all undergo profound change—or rather, such change is already underway. That’s why, earlier during the press interview, I said: the paradigms and mindsets you’ve grown deeply familiar with over the past 10–15 years are poised for disruptive transformation.
If you’ve worked long enough in traditional finance, you can fully anticipate what’s coming. Just as in China, provinces once established large-scale exchanges under provincial financial regulatory offices, hosting numerous financial assets. But as compliance and regulation gradually strengthened, in simple terms—survival of the fittest—high-quality assets were progressively integrated into institutional portfolios. Our entire crypto-asset market is undergoing exactly this same process.
Consider how commonplace commodity trading feels today—but remember, prior to the 1980s, financial derivatives for commodities weren’t widely accessible, and most people couldn’t truly trade them.
- Trading copper, aluminum, lead, zinc, or palm oil feels routine today—but it didn’t exist back then;
- Foreign exchange trading feels convenient today—but it didn’t exist back then;
- Trading government bonds and interest-rate futures feels easy today—but it didn’t exist back then.
Does this feel reminiscent of how we felt in 2009, when stock-index futures and options first launched in China?
If it does, then you’ll understand: we’re at precisely the same historical inflection point. Back then, technological progress drove traditional finance’s evolution toward FICC integration; today, the same principle applies—only the underlying driver is now data and computing power.
Artificial intelligence, combined with underlying cryptographic or blockchain technology, is reconstructing finance around technology as its core. Our financial industry is undergoing profound transformation—which is why we’ve been closely observing this space. Honestly, though, we previously did not participate—not at all.
I often joke that, in its early stages, this industry truly required some “faith”—some so-called “fundamentalism.” But real capital doesn’t overcommit to “faith-based trading” in early-stage markets. Capital only incorporates assets into its asset-management framework once the market matures sufficiently and demonstrates clear predictability.
Take red beans or green soybeans, for example—would major financial institutions ever include these in their asset allocations? Absolutely not. Today, however, we can turn copper into futures and options, package it into ETFs, and integrate it into full investment portfolios. This formalization and financialization process is precisely what the crypto-asset ecosystem is experiencing—and the parallels are striking.
2022 marked the first time I genuinely interacted with industry leaders in this space—a serendipitous connection. It originated from a comment I made during a 2021 interview, when Bitcoin hovered around $70,000.
When asked for my view, I responded bluntly—true to my nature: “Using our traditional finance framework, we frankly cannot yet grasp what this asset fundamentally is. We don’t subscribe to your ‘faith-based’ narratives—we interpret things through our own lens. For instance, regarding its value-preservation function, we analyze it using traditional financial frameworks and language.” At that time, I believed the timing wasn’t yet right for us to engage with this asset class.
I added: “We are observing—but I still don’t fully comprehend your logic, nor have I finalized my valuation model for it.” Still, I sensed something emerging. When the journalist asked what that feeling was, it stemmed from the fact that U.S. financial regulators—including the Commodity Futures Trading Commission (CFTC)—had explicitly classified Bitcoin as a commodity—a tradable financial asset. To me, that simplified everything: I could directly use this official definition to understand its asset attributes.
I also said something else—purely speculative: If macro liquidity tightened sharply in 2022, high-valuation assets in our traditional asset universe would inevitably face widespread de-rating. If my understanding of crypto assets was correct, they too would follow traditional assets into parallel de-rating and liquidity contraction. I speculated—blindly—that Bitcoin would fall by half. That’s why, when it actually dropped to $20,000+ by year-end 2022, many in the crypto community came seeking me out—they suddenly realized: “Has the era changed?”
Over several years of dialogue, I’ve found that many true crypto-industry leaders resemble traditional finance leaders of yesteryear. In early industry phases, growth patterns tend to be rough-and-tumble.
Recall China’s early commodity-futures pioneers—weren’t they all similarly rugged, self-made? Didn’t they all need to “go all-in, turning mopeds into motorcycles”? Yet those who ultimately shape the future are precisely those who—crucially, note: not “transform,” but “pivot”—can swiftly absorb new ideas and pivot at the right moment. Those clinging rigidly to early-stage experience will inevitably be phased out by the times—“The era creates you; the era discards you.”
Based on my observations, 2025–2026 may mark the historic pivot point for the crypto-asset sector. Initially, our exchanges were simple: mutual learning. You’d explain your understanding of crypto assets to me; I’d absorb and integrate it from a traditional finance perspective, reinterpreting the concept. Simultaneously, I’d explain how traditional finance analyzes and frames such assets using existing pathways and logic.
Through mutual tolerance and integration over several years, we’ve already forged a new system. From our vantage point—including late last year—macro liquidity tightening triggered valuation compression, while the crypto industry repeated the exact same story unfolding in traditional financial markets. What does this signify? It confirms we’re on the right path. Tolerance and integration ultimately erase boundaries. Just as the traditional stock traders depicted in *The Wolf of Wall Street* eventually merged seamlessly with FICC practitioners of the 1970s–1980s, the future will be an era of “FICC + C,” where distinctions between traditional finance and crypto assets fade entirely.
Of course, for traditional financial institutions, compliance is paramount. By 2025, we enter a crucial inaugural year. Whether it’s stablecoin legislation or definitive regulatory frameworks for digital and crypto assets, the advancement of these key laws signals the market’s ultimate trajectory. At this juncture, the logic becomes straightforward: you’ll soon see Wall Street institutions—and legacy financial giants—rapidly enter this space. Like diversifying foreign-exchange reserves, institutions will incorporate crypto assets as part of diversified reserve holdings—evolving from singular reserve or trading assets into diversified trading assets. Just as we once integrated commodities, FX, and interest rates, we’ll now integrate crypto assets. Remember this: when this integration truly occurs, the market’s foundational logic will herald a new era—and old habits will become relics of the past.
Looking back historically, after the 1980s, retail participation in U.S. equity markets gradually declined, while institutional participation steadily rose. Such institutionalization is an inevitable phase in any market’s journey from infancy to maturity.
Is the crypto market now at this stage? My answer is yes. Stablecoins have already isolated and operationalized the payment function of cryptographic (or blockchain) technology. So consider: what, fundamentally, is Bitcoin?
A journalist just asked me whether Bitcoin is “digital gold.” My following remarks may prove controversial—why? Because interpretation depends on the listener’s level of understanding. If you say “digital gold” to me, I instantly grasp your intended meaning. But if you say it to an average investor, their first mental image is physical gold. So—what is gold? We must define it comprehensively: it is a commodity asset possessing value-preservation functionality and tradability.
Some assets possess value-preservation functions but lack scalability for financialization or tradability. A simple example: my younger son’s Air Jordan sneakers—do they hold value? Many people harbor vast misconceptions about “value.” Likewise: do your collectible figurines hold value? Your Richard Mille watch?
First, if “value” refers to broad societal value, then fine—emotional value and companionship value are valid. But do they possess scalable financialization and tradability? Not necessarily. Ask veteran collectors who “roll prayer beads”: does the wood in their hands hold value? Do walnuts hold value? Does the orchid hold value? Saying they hold no value is inaccurate—under broad definitions, they do. But saying they hold value in the sense of financialization and tradability is equally inaccurate—because they lack those attributes.
Thus, providing complete and precise definitions for any asset is critically important. Regulatory authorities have now delivered clear, standardized definitions for crypto assets. The core developmental path of Western financial society is unambiguous: “What is not prohibited by law is permitted.” It encourages innovation and exploration—you act first, just as we did with financial derivatives decades ago. When clients demanded options and swaps, but neither markets nor regulations existed, we simply built them. Then compliance followed incrementally, layer by layer, maturing the market. Thus, the entire history of Western finance is a cycle of “financial innovation → regulatory catch-up → maturity.” Crypto assets follow precisely this same logic.
So now you must ask yourself: by 2025, has regulatory certainty arrived? My answer is yes. In the future, you’ll see stablecoins as the application of blockchain technology in transaction and payment systems.
And Bitcoin? What will it become?
It will become a “tradable, financially viable asset with value-preservation functionality”—the most complete definition possible. Of course, I know this definition will upset many “fundamentalists” from the prior era. But let me be clear: this is the era’s inevitability—this is the natural progression within modern finance’s logical framework. At this stage, traditional Wall Street capital can fully engage.
A new chapter is about to begin. Will today’s speech enter the history books? Of course, I hope it does—or at least sparks reflection among you. I believe this answers the question many wanted to ask: “Mr. Fu, why has a veteran of traditional FICC crossed over into such a novel industry?” My reply is: Because your industry has matured to the point where it belongs in traditional investment portfolios.
That’s all I have to share with you today. Thank you!
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