Wash Debut Expectations Reversed: In the Multi-Asset Era, an Inescapable Macro Test for Web3 Players
TechFlow Selected TechFlow Selected
Wash Debut Expectations Reversed: In the Multi-Asset Era, an Inescapable Macro Test for Web3 Players
Currently, the boundaries between TradFi and Crypto are becoming increasingly blurred. The ability to switch freely between them and understand each other's language will be the true advantage for the next generation of investors.
Navigating Web3 tides with focused insightsAuthor: Jessy
Warsh's Debut, Fed Direction Completely Reverses
On June 17, Kevin Warsh, in his capacity as the new Chair of the Federal Reserve, presided over his first FOMC meeting since taking office.
In the March meeting minutes, most officials were still betting on one or two rate cuts within the year. Many crypto investors had high expectations for Warsh; in the public perception, since he was appointed by Trump, he would likely promote loose monetary policy after taking office.
After the meeting concluded and the dot plot was released, the result was unexpected: among the 18 officials who submitted forecasts, 9 expected at least one rate hike within the year, with 6 expecting two or more rate hikes.
Clearly three months ago the Fed was still discussing "how many cuts," but unexpectedly, during Warsh's debut this time, they were discussing "how many hikes."
Warsh said, "Look at the data."
The three major US stock indices plunged collectively, with the Nasdaq falling over 1%; the crypto market reacted more violently. Bitcoin was originally rebounding above $65,000, but once the meeting result came out, it fell directly to around $64,000, a drop of nearly 3%.
Looking through interpretations from various financial media, some crypto investors wanted to obtain an explanation for "look at the data," but instead stepped directly into a deeper "terminology fog."
Various professional terms came crashing down overwhelmingly: one moment it was CPI month-on-month hitting a new high, PPI production-side prices not fully transmitted yet; the next moment it was May non-farm payrolls far exceeding expectations, with data from the previous two months needing "upward revision"; what collapsed crypto investors most was the Fed's own updated Economic Projections (SEP), filled with PCE, Core PCE, median downshift of the dot plot...
Looking at the dense professional interpretations, not only did it not make things clear, instead it evoked a strong sense of powerlessness.
In the eyes of financial media, these data points are interwoven with clear causality. But in the eyes of most people, these abbreviations and impact logic are like a brand new foreign language; every word is recognized, but connected together, fundamentally no one knows what it is saying.
To truly understand this meeting, it seems necessary to understand the whole set of TradFi (Traditional Finance), such as how inflation, interest rates, and the Fed's decision-making mechanism actually operate.
But at present, a crypto investor has to, just like investors in the traditional financial market, keep an eye on Fed meetings, international situations, the US Dollar Index, and the tightness of global liquidity.
After all, today when the integration of crypto and traditional finance is becoming increasingly tight, crypto is long no longer an isolated island, but part of the global asset landscape, rising and falling together with the US dollar, US Treasuries, and risk appetite.
In the Multi-Asset Era, Crypto Investors Need to Learn TradFi Even More
In earlier years, the rise and fall of the crypto community was not yet closely related to the tides of the global economy.
In recent years, with ICOs booming and Meme coins prevailing, crypto investors are more accustomed to observing the movement of on-chain funds, the buy and sell operations of whales, and following current industry technology hotspots to find investment targets.
Information such as Fed FOMC meetings, non-farm data, and CPI that traditional financial investors need to focus on was not that important to crypto community investors.
But starting from 2024, the correlation between cryptocurrency fluctuations and the macro economy has become increasingly tight.
In January of that year, Bitcoin spot ETFs were officially approved for listing in the US, and half a year later, Ethereum spot ETFs followed suit.
Wall Street money was able to buy virtual currencies like Bitcoin openly and on a large scale for the first time.
After traditional asset management giants like BlackRock and Fidelity entered the market, crypto assets, like stocks and bonds, were packed into the same balance sheet, rising and falling following the same macro logic.
The binding between crypto and macro finance is becoming deeper, and everyone has to start learning TradFi-related knowledge.
For most crypto community traders, this is not an easy thing.
For example, before the June 17 meeting, many crypto players defaulted Warsh into the dovish camp simply because they didn't understand the two terms "hawkish" and "dovish"—since he was nominated by Trump, he should promote easing.
But actually hawk/dove is not a political stance, it is central bank officials' judgment on current data: high inflation tends towards hiking rates to control prices (hawkish), weak economy tends towards cutting rates to stimulate (dovish).
When Warsh took office, inflation was sitting at 4.2%; he could not ignore the data.
Without clarifying the true meaning of one word, the judgment was wrong.
Financial Education Should Be Simpler
If you want to learn the true meaning of relevant concepts mentioned in the meeting after it ends, then with a casual search, what you can find is either paper-style long analysis or professional textbooks mixed with a bunch of English abbreviations.
But for ordinary investors, the learning content they want to find is actually very simple: be able to explain clearly in plain language what this thing is and why it is important.
The matter of traditional financial education has always had a high threshold.
Terms are piled densely, the expression style leans towards academic, as if defaulting that readers already have a certain financial foundation before qualifying to read further.
But for many people transitioning from the on-chain world, they precisely lack the "foundation" shaped by traditional financial academic education.
But the best education often comes from the simplest questions, such as what is a stock? Why do companies want to go public? Why does gold rise as soon as there is a war? What does cutting rates actually mean? What exactly is an ETF?
These questions sound basic to the point of being somewhat "childish," but the process of learning new knowledge is precisely about understanding these "childish" questions one by one before being able to understand more complex logic.
The author noticed an investor education series——"TradFi Popular Science 101 Questions", initiated by Bitget jointly with industry partners, the thinking happens to be very similar to the "foundation" of financial learning that I want.
At present, the combination of TradFi and Crypto is undoubtedly becoming increasingly tight; major mainstream exchanges have already listed US stocks, RWA of traditional financial assets like gold; the barriers between crypto and traditional finance are rapidly melting, and cross-asset trading has become a clear development trend.
But most platforms in the industry only focus on expanding trading categories and enriching product tracks; few people settle down to solve the core pain point of investors——the vast majority of native crypto community players lack complete, popular traditional financial knowledge reserves.
Launching systematic financial popular science at this node is not something that can quickly bring traffic and revenue, but it is a difficult yet correct thing.
According to the official introduction, "TradFi Popular Science 101 Questions" breaks down traditional financial learning into 100 specific small questions, categorized into six modules: from the most basic "Rediscovering Money and Markets," to "What Exactly Are Assets Like Stocks and ETFs," then to "How Order Books, Leverage, and Market Makers Operate," followed by macroeconomics, trading psychology, and finally describing what it looks like after the deep integration of TradFi and Crypto.
Accompanied by video animations, the content covered by a thick financial textbook is broken down into vivid short videos.
The crypto industry has long said goodbye to the barbaric era of only looking at on-chain data; institutional funds brought by ETFs and real assets opened up by RWA have placed Crypto thoroughly within the global liquidity large cycle.
The future financial market must be bidirectional interoperable: traditional financial assets moving on-chain, crypto assets included in the global major asset allocation list.
At present, the boundary between TradFi and Crypto is becoming increasingly blurred; being able to switch freely between them and understand each other's language will be the true advantage of the next generation of investors.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
