Organizer: 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 New Fire Group, made his debut. He stated that the essence of traditional financial veterans embracing the crypto world is akin to how computer technology reshaped traditional finance in the past, as today AI and blockchain are driving a new wave of transformation. In the future, traditional finance and crypto assets will fully integrate, entering an era of "FICC+C." Below is the full text of the speech:

These days, many people have been crazily asking me one question: Why am I so close to the crypto world?

In fact, this opportunity started around 2022, and it has been about four years now. As a practitioner in the traditional finance field, we have been closely monitoring and tracking the trends of the entire crypto asset market.

Today, I am here to give a speech, and my intention is quite simple; I just want to tell you a historical story. For me, I am one of the main beneficiaries of the previous era's dividends. You may see my title as "Economist," but I am not purely an academic.

For the past 25 years, my real core experience, which is the core business we have been doing, is what everyone understands as traditional hedge funds. You must be curious why these traditional capital and individuals in the traditional finance field have begun to pay attention to crypto assets?

In the past year, I have repeatedly mentioned a viewpoint: the future will definitely be "FICC+C," meaning that traditional asset allocation (FICC) will include crypto assets (Crypto). Many people want to know the reason, and I take this opportunity to share a simple insight with everyone. As long as you understand this logic, you might already have an answer in your mind regarding how the market will evolve and how asset prices will move.

Today, I will help break through this layer of glass. We need to rewind time back to the origin of FICC's major asset classes—around the late 1970s to early 1980s. In the past decade, esteemed participants here have recognized that the overall framework and structure of our world are undergoing significant changes. This change resembles the time point after World War II, particularly the 70s to 80s. For example, Xiao Feng just mentioned artificial intelligence, and other guests have also talked about the integration of AI. As a crucial technological advancement and productivity, every leap in technology and productivity will reshape various industries.

The term "various industries" encompasses all sectors, and it inevitably includes the financial field. Finance is not static. It is definitely not what you see in films like "The Big Bang" or "The Wolf of Wall Street"—traders in vests shouting orders on the trading floor. Or many people may think that finance is merely about trading in the trading hall when visiting the New York Stock Exchange. Indeed, many journalists still prefer to use images of floor trading as the backdrop for their news reports. If you go to Chicago, the earliest interest rate derivatives market, or the London Metal Exchange (LME), you can still see traces of this history. Indeed, that was the most traditional finance before the 60s and 70s. People were making quotes in vests, using typewriters and punch machines to complete transfers, trades, and payments.

For most people in the Chinese-speaking world, the impression of trading may still be about looking at ticker machines in a stock trading hall, staring at prices, filling out orders, and handing them to the counter officer, who then calls the exchange to complete the transaction. However, not all finance or trading remains in that era; the biggest transformations in the finance sector inevitably occur with advancements in technology.

In the last technological progress cycle, productivity and technological advancements centered around semiconductors, computers, personal computers, DOS systems, Windows, etc., restructured the new format of finance around the late 70s to early 80s. The familiar FICC major asset trading, simply put, is the integration of financial assets such as interest rates, commodities, exchange rates, and stocks, and FICC originated in the early 1980s. In the 70s, the pricing of financial derivatives, such as the Black-Scholes model for options pricing, was something everyone learned in school. But can you imagine if there was no large-scale application and popularization of computers? Pricing and valuing a financial derivative or asset would take dozens of minutes or even over half an hour to calculate manually. In that situation, how could we efficiently complete pricing and trading?

From 1985 until now, professional investors and investment institutions have only started widely using Bloomberg terminals. I began using the then Thomson Reuters 3000 around the time of the 1997-1998 Asian financial crisis, as well as later versions like Reuters Extra and Eikon. In other words, it was the arrival of computers, semiconductors, information technology, and the data age that birthed the subsequent FICC. We therefore had richer asset classes, integrations between assets, cross-asset trading, as well as hedge funds, algorithmic trading, and well-known "grand medal" funds, etc. Without this advancement in productivity, finance might still be stuck in the era of traders shouting orders in vests, which many people are familiar with.

During that period, JP Morgan on Wall Street became the biggest leader in the entire financial derivatives market. At the time, JP Morgan hired Cambridge graduate Blythe Masters, who became the pioneer of the entire financial derivatives market and FICC market, turning FICC business into the most profitable income segment for mainstream financial institutions on Wall Street.

Of course, none of this is unrelated to the turbulence of the world in the 70s and 80s. One thing you must remember: the origin of technological advances often coincides with the origin of global turbulence. In a specific historical phase, technological leaps always coexist with turmoil in world systems and orders.

In the 70s and 80s, we experienced the Cold War, Middle Eastern wars, the dollar oil crisis, witnessed soaring gold prices, and systemic decoupling. However, the development of human civilization always accompanies risks and opportunities.

While the world order appeared chaotic, our computers, semiconductors, and information technologies rapidly rose. I used to jokingly mention that in that era, there was a rather peculiar investment portfolio, which involved holding both "assets representing the future of humanity" and "assets hedging the lack of a future for humanity" concurrently.

You may reflect; not even mentioning as far back as the past ten years, starting around 2019, take a look at your investment portfolio—did you also end up holding both "the future of humanity" and "assets with no future" today?

Today, as we all begin to realize that elements like AI intelligence, data, and computing power will become the most important productivity for the future and even the next era, our "game" has actually passed the halfway mark. And this entire first half corresponds to what everyone recognizes as the traditional "crypto circle."

Why am I saying all this?

You must remember, there is nothing that remains unchanged; everything continually undergoes reconstruction and rebirth throughout their development process.

So when we talk about the moment of entering this circle, it is also the moment of "FICC+C." I don't know if this will leave an important mark in history, just like Blythe Masters left her mark in the history of FICC. Will this become an important node, marking the end of the early development phase of the past 10 to 15 years and the arrival of a completely new development phase?

In the transition between these two phases, investors, participants, market institutions, and game rules will undergo tremendous changes, or rather, such changes are already occurring. So as I said when interviewed by reporters earlier, those paradigms and thinking you have been so familiar with over the past 10 to 15 years may undergo disruptive changes in the future.

If you have a long enough tenure in the traditional finance field, you can actually foresee what is about to happen. Just like in China back then, we had large-scale exchanges set up by various provincial financial offices and many financial assets. However, as compliance regulation gradually strengthened later, in simple terms, it’s survival of the fittest; quality assets that remain will gradually be incorporated into the asset portfolios of financial institutions. Our entire crypto asset market is actually undergoing the same process.

For example, everyone is now accustomed to commodity trading, but you should know that before the 80s, financial derivatives for commodities were not widespread, and most people could not really trade.

• Now everyone finds it commonplace to trade assets like copper, aluminum, lead, zinc, and palm oil, but those stayed absent back then;
• Everyone now finds trading exchange rates convenient, but that also didn’t exist back then;
• Now we can easily trade government bonds, interest rate futures, and it was also unavailable back then.

Does this feeling resemble the sensation we had when stock index futures and options first appeared in 2009? If you have that experience, you will understand that we are at a similar historical node. The technological progress back then drove the transformation and integration of traditional finance into FICC, and today, the driving force has shifted to data and computing power.

Artificial intelligence, together with the underlying cryptographic technology or blockchain technology, is restructuring finance around technology. Our finance industry is undergoing profound changes, which is why we have been closely watching this field. But to be honest, we previously did not participate, not at all. I often joke that in the early stages, this circle truly required some "faith," some so-called "fundamentalism." However, real capital will not over-involve itself in such "faith trading" in the early stages. Capital will only incorporate it into asset management frameworks when the market gradually matures and becomes certain.

Take an example, back then, if the market was trading red beans and green soybeans, would you think large financial institutions would consider these as part of their asset allocation? Impossible. But today, we can make copper into futures, options, and ETFs and include it in the entire investment portfolio. This process of transitioning toward formalization and financialization is actually similar to what the entire crypto asset circle is experiencing right now.

2022 was my first real intersection with the big players in this circle, which is also a kind of fate. It originated from a statement I made during an interview in 2021 when Bitcoin's price was around $70,000. When a reporter asked for my opinion, I, being straightforward, said simply: Following our traditional finance paths and framework, we truly cannot comprehend what kind of asset this is. Because the things you talk about regarding belief, we do not recognize; we have our own ways of interpretation. For instance, regarding its value maintenance function, we would interpret it using traditional finance frameworks and language. At that time, I felt we hadn't reached the moment to engage with such assets.

I mentioned that we are indeed observing, but I still could not fully grasp your logic; my understanding and valuation model were not fully formed yet. However, I had a slight feeling. When the reporter asked me what this feeling was, it came from the fact that at the time, the US Commodity Futures Trading Commission (CFTC) and other financial regulatory bodies had already clearly defined it as a commodity, a tradable financial asset. For me, this became very straightforward; I could utilize this official definition to understand its asset attributes.

I also made a blind guess: If in 2022, with a significant tightening of macro liquidity, we easily witness high-valuation assets in our traditional asset circle experience massive "valuation slashing" markets, then if my understanding of crypto assets is correct, it will likewise experience valuation slashing and tightening liquidity alongside traditional valuation assets. I blind guessed it would drop by half. This is why later, by the end of 2022, when it actually dropped to over $20,000, many people from the crypto circle came to find me because they suddenly realized: Has the era changed?

In the past few years of communication, I found that many true leaders in the crypto circle are actually quite similar to the leaders in the traditional finance circle back then. At the early stage of the industry, everyone’s development approach was rather rough. You can recall, including the big names in China who engaged in commodity futures trading in earlier years, who wasn’t growing in a rough and barbaric way? Who didn’t need to "paddle up, and a bicycle becomes a motorcycle?" But truly capable of achieving the future are those who can quickly absorb new things and complete turnovers when the moment comes—notice, I did not call it transformation, but rather a turnover. Those who still cling to their early experience will gradually be eliminated by the era; as the saying goes, "The times shape you, and they will also eliminate you."

My personal observation is that 2025 to 2026 may be the historic turning point for the crypto asset field. When everyone sought to communicate, it was quite simple; we learned from each other. You could tell me what you believe crypto assets are, and I would absorb and integrate from a traditional finance perspective to reinterpret this matter; at the same time, I would also share how we in traditional finance understand these types of assets through existing paths and logic.

Through mutual tolerance and integration over these years, a new system has formed. These past years, particularly by the end of last year, from our perspective, macro tightening of liquidity brought about valuation pressure, and the crypto asset circle experienced a story that synchronously occurred once again with the traditional financial market. What does this indicate? It indicates that the path we are walking is correct. Tolerance and integration will ultimately lead to indistinguishability. Just like those traditional stock traders in "The Wolf of Wall Street" in the 70s and 80s and later those doing FICC major asset allocation, in the end, they became indistinguishable. Therefore, the future will definitely be an era of "FICC+C," where there will no longer be significant boundaries between traditional finance and crypto assets.

Of course, for us traditional financial institutions, the most essential point is compliance. By 2025, it marks an important starting point. Whether it’s a stablecoin bill or the regulatory certainty we see regarding digital and crypto assets, the progression of these significant bills has already shown us the final answer of this market. At this moment, the logic becomes quite simple: in the future, you will see the financial institutions on Wall Street and the former traditional financial giants rapidly entering this market. Just like diversifying foreign exchange reserves, institutions will integrate crypto assets as part of their diversified asset reserves, transforming from a single reserve or trading asset to diversified trading assets. Back then, we could include commodities, exchange rates, and interest rates, and today, we can also include crypto assets. Always remember: when this integration genuinely occurs, the underlying market logic will herald the arrival of a new era; old habits will completely become a thing of the past.

Looking back at history, since the 80s, the proportion of retail investors directly participating in the US stock market has been gradually declining, while the proportion of financial institutions participating has been gradually increasing. This institutional trend will similarly occur in any market transitioning from its early to mature stage. Is the crypto market now at this stage? My answer is: Yes. Stablecoins have isolated the payment functionality of crypto technology (or blockchain technology).

So you might ponder, what exactly is Bitcoin?

A reporter just asked me if Bitcoin is really "digital gold." My following response may be somewhat controversial. Why? Because it depends on the level of understanding of the audience. For example, if you say "digital gold," I can immediately grasp what you want to convey; however, when you say it to ordinary investors, their first reaction may be physical gold. So, what exactly is gold? We can only provide it with a complete definition: it is a commodity asset that has value maintenance functionality and is tradable.

Some assets possess value maintenance functionality, but they do not necessarily have large-scale financialization or tradable capacity. For example, is my son's AJ basketball shoes valuable? There is a significant deviation in how many people understand "value." Furthermore, do the figurines you bought have value? Do your Richard Mille watches have value?

First, if the "value" here refers to a broad sense of value, then that’s correct; emotional value is still value, companion value is value too. However, do they possess attributes of large-scale financialization and tradability? That’s not necessarily true. Try asking those "experts" who love trading strings, do the wooden items they hold have value? Do walnuts have value? Do orchids have value? If you say they have no value, that’s definitely wrong because under a broad definition of value, they indeed have value; however, if the value you refer to is that which can be financialized and tradable, saying they have value would also be incorrect, for they do not possess those attributes.

Thus, providing a complete and accurate definition for any asset is very important. Currently, the standard definition given by regulatory authorities for crypto assets has become very clear. The core path of development for Western financial society is quite clear: if it is not explicitly prohibited by law, you can do it. It encourages innovation and exploration. You first act, just like we did in the development of financial derivatives. Back then, everyone said, I have clients with options and swaps demand, but we did not have this market or corresponding regulations, what should we do? Let’s start doing it. Once that kicked off, compliance would gradually follow, maturing the market through multiple layers of nesting. So the entire history of Western finance is a process of "financial innovation—compliance follows—into maturity." Crypto assets tread the same logic.

Now you need to judge: By 2025, is there a definitive answer regarding the follow-up of financial regulation? My answer is: Yes. In the future, you will see that the products of blockchain technology applied to trading and payments will be stablecoins. So what will Bitcoin become? It will become an "asset that has value maintenance functionality and can be financially traded," the most comprehensive definition for it. Of course, I know that this definition will surely make those with "fundamentalist" thinking from the previous era quite unhappy. But I want to say to everyone, this is the inevitability of the times; this is a complete evolutionary process that aligns with the framework of modern financial logic. At this stage, traditional capital on Wall Street can fully engage.

A new chapter is about to begin. I don't know if my speech today will be recorded in history? Of course, I hope it can be recorded in history or at least provoke some thoughts among you. I believe this also answers many people’s questions: "Mr. Fu, as a soldier of traditional FICC, why did you cross over to such a new industry?" I want to say: Because your industry has matured to the point of being included in traditional investment portfolios.

That's all I would like to share with you today, thank you all!

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