Peng Fu's First Public Speech in 2026: Why Did I Join the Cryptocurrency Industry?
Content compiled by: Eric, Foresight News
On April 23, Beijing Time, at the Hong Kong Convention and Exhibition Centre, during the Hong Kong Web3 Carnival, Fu Pengjin, the newly appointed Chief Economist of Nova Fire Group and a well-known domestic macroeconomist, delivered his first public speech for 2026.
In this speech, Fu Pengjin elaborated for the first time on his understanding of crypto assets and his interpretation of the current role of crypto assets in the macroeconomic environment.
The author has compiled all the content of Fu Pengjin's speech, with some alterations.
Many people have been asking me frantically in recent days why I have been so closely involved with the crypto and blockchain community. In fact, this opportunity can be traced back to around 2022, so it has been about four years.
When I was in the traditional financial sector, I was also closely following and tracking the development of the entire crypto asset market. Of course, today as I give this speech, it's quite simple; I'm just going to tell you a historical story because, for me, I am actually a major beneficiary of the dividend from the previous era.
So you may think that my title is Economist, but in fact, I am not a scholar. The core experience of my past 25 years, and what we are really doing, is what everyone understands as a traditional Hedge Fund.
You must be wondering why these traditional capital, people from the traditional financial sector, or money, are starting to pay attention to it (crypto assets)?
Over the past year, I have repeatedly emphasized that the future will definitely be "FICC+C," where the major asset classes allocation will include crypto assets. Many people are curious about why, so I will take this opportunity to share a brief insight with everyone. Once you understand this sharing, about how the market works, how asset prices move, etc., you may already have the answers in your mind. So, today, I will help you see through this superficial layer.
This timeline needs to go back to the origin of the FICC major asset class. When was this? Probably in the late 1970s to the early 1980s. In the past decade, all of you present here have been able to clearly perceive that the entire world's overarching framework and structure are undergoing tremendous changes. This change, most similar to the post-World War II period, is in the 1970s and 80s.
For example, just now I heard Mr. Xiao Feng mentioned artificial intelligence, and all the guests also talked about the integration of AI. As an important advancement in technology and productivity, each round of technological progress and productivity advancement will reshape various industries. These industries include all sectors, and of course, they will inevitably include the field of finance. Our finance industry is not static, definitely not.
For instance, in movies like "The Big Short" and "The Wolf of Wall Street," the portrayal of finance is about people wearing vests on the trading floor shouting orders. Or if you go to the NYSE, many people still think of finance as everyone gathering on the trading floor for quoting prices and making deals? Of course, many journalists still like to use this kind of open outcry trading background for news reporting.
If you go to Chicago to see the earliest interest rate derivatives market, or to the London Metal Exchange (LME), you will still see traces of this history being preserved. Yes, that is the most traditional form of finance, which can be said to be the finance before the (20th) century.
People in vests quoting prices, completing transactions and payments through typewriters and punch card machines. Perhaps for the Chinese-speaking community or for most Chinese people, the impression of trading is in a stock exchange hall, looking at the so-called 'flop board,' checking the prices, filling out order tickets, handing them to the counter, and then having a girl use a phone hotline to create a trading platform to execute the orders.
Not all finance or trading is stuck in that era; the biggest changes in finance always happen with the advancement of technology.
Therefore, in the previous cycle of technological advancement, with semiconductors, computers, personal computers, DOS system, Windows system, and other productivity cores, which represent the advancement in technology. It restructured our financial industry into a new form in the late 1970s and early 1980s. The familiar category of asset trading we now know is simply a fusion of various financial assets such as interest rates, commodities, exchange rates, stocks, and so on.
The birth of FICC was in the early 1980s. Around the 1970s, pricing of financial derivatives products, such as options pricing, the Black-Scholes model, and so on, which many of you should have learned in school. But think about it, if there was no widespread use and popularization of computers, and if pricing a financial derivative product or a financial asset required fifteen minutes, twenty minutes, or even thirty minutes to calculate, how could I possibly complete quoting, trading, and executing?
Starting from 1985, all professional investors and investment institutions began to use Bloomberg terminals.
Back around '97, '98, during the Asian Financial Crisis, I started using Reuters 3000 at the time, then later moved on to Reuters Xtra and eventually Eikon. In other words, the era of computers, semiconductors, information technology, and data laid the groundwork for what later became FICC.
We saw the emergence of asset classes, asset convergence, cross-asset trading, hedge funds, algorithmic trading, and well-known entities like the Big Bang. Without this leap in productivity, finance would still be stuck in the era many think of as traders in vests shouting orders.
JP Morgan on Wall Street became the foremost driver of the entire financial derivatives market. At that time, JP Morgan hired the brilliant Cambridge graduate Blythe Masters, who became the pioneer of the entire financial derivatives market, transforming the FICC business into the most profitable segment of mainstream Wall Street institutions.
Of course, this was not far from the turmoil of the '70s and '80s. Remember, the origin of technological progress is also the origin of global upheaval.
Technological progress, at a certain stage, coexists with the upheaval of the global order. So, in the '70s and '80s, we experienced the Cold War, the Middle East conflicts, the US dollar's oil crisis, the so-called skyrocketing gold prices, and systemic decoupling. However, human civilization always walks hand in hand with opportunities and risks.
While the world order was in disarray, our computers, semiconductors, and information technology were on the rise. I used to joke that during that time, there was a strange investment portfolio: investing in both "humanity has a future" and "humanity has no future" simultaneously.
Think about it. It's been quite a while since the past, probably around 2019, when you would look at your assets related to "humanity has a future" and "humanity has no future" and find it challenging to hold onto them today. Of course, up to this day, as all of us are beginning to realize that artificial intelligence, data, and computing power will be the most critical productivity factors of the next era, the game is already more than halfway played.
The first half was the traditional cryptocurrency world as we know it. Why do I mention this? Because remember, nothing is constant; everything evolves, continuously reshaping and rejuvenating.
So, as I said back then, it's quite possible that the moment I entered this circle may or may not leave a significant mark in history.
Will it be a key milestone like when Blythe Masters joined JP Morgan?
(This milestone) 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 structures, and rules of the game will undergo significant changes. Or it could be said that they are already undergoing significant changes.
Just now, during an interview with a reporter, I mentioned that many of the familiar ways of thinking from the past 15 years, the paradigmatic ways of thinking you have been familiar with for the past 10 to 15 years, may undergo significant changes.
Of course, if your years of experience in the traditional financial field are long enough, you actually know exactly what is about to happen. Just like in China back then, we had trading platforms established by large-scale provincial financial offices, and we had a large number of financial assets. But as compliance gradually strengthened in the background, in simple terms, there will be survival of the fittest.
Then financial derivatives will gradually be included in financial institutions' asset portfolios, and our entire crypto asset class has actually gone through the same process. Like commodities are common now, but you should know that before the 1980s, financial derivatives of commodities were not popular at all, and most people could not really trade them.
What's common now like copper, aluminum, lead, zinc, palm oil, and so on; what everyone finds convenient in trading exchange rates now, but back then you would find it was not available; now we can easily trade government bonds, interest rate futures, which were not available back then. In fact, does this feeling resemble 2009, when you saw the introduction of stock index futures, options, and derivative products?
If you do, then you actually understand that this is the same time point. So, just as the technological advancement back then drove the entire traditional finance towards FICC's transformation and integration, today is the same principle, with data, computing power, artificial intelligence, and underlying technology, which is actually cryptographic or blockchain technology, at the core, reconstructing finance, our finance is also changing.
So we have been paying attention to it in the past, but to be honest, we will not participate at all. So I joke that perhaps in the early days, indeed you have to talk about a little faith, talk about the so-called fundamentalism, right? Everyone has to have faith in this. But as a true capitalist, one will not overly engage in this faith-based trading in the early stages.
Only when (crypto assets) gradually grow and reach determinacy will they be incorporated into the asset management framework. For example, in the past, if we were to trade something like red beans and green beans, do you think large financial institutions would consider it as a form of asset allocation? Impossible. But today, we can turn copper into futures options, we can turn it into an ETF, we can include it in the entire investment portfolio.
This transformation is actually the scene that is taking place in the entire cryptocurrency ecosystem. The year 2022 is when I truly started to have interactions with some big shots in this circle. Fate began in 2021, and at that time, when I was interviewed, I said something. Bitcoin was around 70,000 at the time, but when the reporter asked me, I am a very straightforward person, I said it straightforwardly. According to our framework, we indeed could not understand what this asset really is.
Because all the things you are talking about in terms of belief, we do not acknowledge. We have our way of interpreting, for example, about the function of value maintenance, we will use our framework and language to interpret it.
(When I was interviewed) I said I think we do not have the time yet, or it is not the time to intervene in this asset. But I said we are indeed observing, but we are still not very clear about the things you are talking about, I still do not have a complete understanding and model of it (crypto assets).
But I said I have a feeling, because the U.S. CFTC (Commodity Futures Trading Commission) at that time had clearly defined it as a commodity, a tradable financial asset. For me, I can easily use this definition to fully understand one of its attributes.
I said a sentence at that time, I said I will make a blind guess, if in '22 with a significant tightening of liquidity, then in our traditional asset circle, I can easily see those valuation assets experiencing a large-scale devaluation market.
I said if my understanding of it is correct, it will bring the same devaluation market along with the devaluation of valuation assets. I said I will make a blind guess (Bitcoin will) drop by half, which is why at the end of '22 when it dropped to 20,000, many people in the crypto circle came to me, because they suddenly realized that the times had changed.
Of course, in fact, over the past few years of communication, many of the real big shots in the crypto circle that I think, are just like the big shots in the traditional financial circle of the past. In the early days, everyone was quite rough. You can think about it, including those in China, such as the big shots in commodity futures trading, who wasn't rough in the early years, who didn't need to take a gamble, from bicycles to motorcycles. However, those who can truly achieve the future are those who, when it's time to turn, not to transform, but to have a turning point, will quickly absorb and complete this turnaround.
And if we were to follow the same experience as before, those who were essentially shaped by that era would gradually be phased out by the times. From my personal observation, 25 or 26 years might be the time point for us to discuss this cryptocurrency asset.
You can tell me what you think it (cryptocurrency asset) is, and I will also absorb and integrate it from the perspective of traditional finance to gain a deeper understanding of this matter. I will also tell you how we understand this type of asset through our logical path. After a few years of integration and inclusiveness, a new system has actually been formed.
And this includes the past few years up to the end of last year. From our perspective, it is actually a new round of tightening liquidity that has brought about valuation pressure. And the cryptocurrency circle has experienced the same story. What does this indicate?
It indicates that we are on the right path. This kind of inclusiveness and integration will ultimately lead to a seamless integration, just like in the traditional era of the 70s and 80s, where traditional stock traders like those depicted in "The Wolf of Wall Street" were also involved in large asset classes.
So in the future, it will definitely be "FICC+C," and there will no longer be a clear distinction between "you" and "me." Of course, for us, another key point is compliance, so the year 25 is actually a crucial year.
Whether it's the stablecoin legislation or the determinative legislation we've seen for digital assets or cryptocurrency, two key pieces of legislation have actually provided us with the answers to this market. At this point, it's quite simple—all of you will see Wall Street financial institutions in the future, as traditional financial institutions rapidly enter this market. Just like diversifying foreign exchange reserves, it will incorporate it as diversified asset reserves.
(Cryptocurrency assets) will transition from a single reserve asset or trading asset to a diversified trading asset. Back then, I could include commodities, exchange rates, and interest rates. Today, I can include cryptocurrency assets. But remember one thing—when it integrates, the market logic will herald the arrival of a new era, no longer bound by the customs of the old era.
Of course, we've also seen a gradual decrease in the proportion of retail investors in the U.S. stock market since the 1980s, meaning the proportion of retail investors directly participating in the market is gradually decreasing, while the proportion of financial institutions participating in the market is gradually increasing. This trend will also occur in any market.
From the early stage to the mature stage, this is indeed the stage we are in now. My answer is yes. Stablecoins have separated the payment function of blockchain technology, so you can think about what Bitcoin really is. A reporter just asked me whether it's a digital gold. I said that this statement is actually somewhat controversial. Why?
Because it depends on the individual. For example, for me, I might immediately get what you're trying to say. But for the average investor, when you mention this, their first thought might be gold.
So what is gold exactly? It can only be said that this definition is called a tradable commodity asset with a valuable storage (function), which is a complete definition. Some assets can have a valuable storage (function), but they may not necessarily have the large-scale financialization or tradability that we refer to.
Let me give you a simple example. For instance, our son's Air Jordan sneakers. Are they valuable? When it comes to the understanding of value, many people may have a huge deviation. For example, is the action figure you bought valuable? Is the Richard Mille watch you bought valuable? Firstly, if it has broad value, no problem, emotional value is also value, companionship value is also value. But whether it has large-scale financialization and tradability is another matter.
Then you might ask, do the wood pieces in your hand have value? Do walnuts have value? Do philodendrons have value? Saying they have no value is incorrect because if the definition is broad value, then saying they have no value is definitely incorrect. Saying they have value is also incorrect if we're talking about financialization and tradability because they lack that. So, a complete definition is crucial for any asset.
The standardized definition of crypto assets is now very clear to you. The core path of Western society's development is actually quite clear. Where there is no law prohibiting, you can innovate first; it encourages you to be innovative, it encourages you to explore.
Just like our financial derivatives back in the day. Everyone said, my clients have demands such as options and swaps, but we don't have this market, we don't have this regulation, what do we do? Just do it first, and once it's done, compliance follows in layers of nesting, gradually maturing it. So, the entire Western financial system is financial innovation, followed by compliance, and finally entering maturity.
The same logic applies to crypto assets. Now, what you need to judge is, by 2025, has financial regulation caught up, and has a definitive answer emerged? My answer is: yes. So in the future, you will see technology applied in payments with stablecoins.
So what will Bitcoin become? An asset with a valuable storage function that is tradable and financialized, this is its full meaning. Of course, I know this definition will definitely upset the purists of the previous era.
But I want to tell you, this is the era, there is no way around it; this is an entire logical framework. At this point, 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, but of course, I hope it will and provoke some thinking. I believe (today's speech) can also answer the question that many people may have: Mr. Fu, a veteran of the financial industry working in FICC, why did you enter such a new industry? What I want to say is that (cryptocurrency) has matured enough to be included in investment portfolios.
Well, I'll end my sharing here. Thank you.
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