Fu Peng believes the four-year cycle of Bitcoin has ended with institutionalization, and its limited supply actually constrains its capacity as a macro asset. Meanwhile, the explosion of AI technology is reshaping the investor ecosystem, accelerating the transition from a retail-driven, chaotic era to one dominated by professional portfolio allocation.

"I have no faith in BTC."

"My buddy will definitely blow up—his assets will be gradually wiped out. The era of retail investors is over."

"I don’t believe BTC will rise another 2x."

"The four-year cycle of Bitcoin is gone."

"What you call 'faith' is just an asset to me."

"In the next phase, traditional finance and crypto will have no difference in research strategy."

"Gold is already highly marketized—there’s no need to recreate it via RWA."

"I’m bullish on young people running solo hedge funds."

Half a year apart, two interviews, totaling six hours. In conversations with Fu Peng, I heard numerous sharp and direct judgments.

As one of China’s earliest public economists to focus on the crypto industry, Fu Peng holds independent views on BTC, stablecoins, RWA, and the broader crypto market.

From Lehman Brothers Investment Bank in the UK, to Solomon International Investment Group in London, then serving as Chief Economist at Northeast Securities and Newfire Group, Fu Peng has experienced multiple financial market cycles and continually shifted his professional identity.

Yet he insists he has never changed.

In the interview, he repeatedly emphasized not to overvalue changing titles. For the past thirty years, he has consistently done only one thing.

What exactly is that?

In our conversation, we discussed Bitcoin, stablecoins, RWA, Polymarket, AI, Hong Kong’s crypto landscape, and the future of retail investors. Below is the full transcript:

The Crypto World Is No Longer What It Used to Be

Joe Zhou: I attended the 2026 Hong Kong FinTech Week the other day and noticed crypto firms account for less than one-tenth of the entire fintech sector. Do you think this will change in the future?

Fu Peng: The share of crypto in the broader asset class portfolio probably won’t change much. Its underlying core technology has already begun integrating into the traditional financial system.

Joe Zhou: Do you still believe in the Bitcoin four-year cycle?

Fu Peng: No. That’s a relic of the previous era. Moreover, within our analytical framework, there was never really such a thing as a four-year cycle.

Joe Zhou: But it must still have some influence, right?

Fu Peng: You must understand—when a market is still small, large players buying or selling naturally impact prices.

But once it enters the portfolio management era, those factors shift. Not that they have zero impact, but they’re no longer capable of driving price movements.

Joe Zhou: Volatility will shrink.

Fu Peng: Exactly. When institutional forces enter, volatility naturally declines.

Joe Zhou: You previously said the current crypto world is fundamentally different from the old one.

Fu Peng: This statement might upset many people. Some will curse, others will reflect. Those who curse—I’ll say bluntly—they may get phased out by history in a few years. Those who reflect are great; they’ll seriously consider things and might even find directions.

Joe Zhou: So what do you think the old crypto world looked like? How will it evolve in the future?

Fu Peng: Do I even need to imagine how the old crypto world looked?

I just gave you an example: the Hong Kong stock market during the time of Fang Zhanbo—wearing disguises, shouting orders live, right? Exactly the same. Extremely high retail concentration, speculative trading, gambling-style strategies, high volatility—all hallmarks of that era.

Now bring this to China—what was it back then? Hainan Commodity Exchange. Coffee, red beans, green beans, sugar, sorghum… Whether you’ve experienced it or not, we had countless exchanges across provinces. We had OTC counter markets for stocks and various commodity exchanges. Isn’t that identical to the later crypto world? A bunch of exchanges, countless altcoins, niche products—no difference at all.

So people like us, who’ve lived through those times, aren’t unfamiliar with this space—we’re deeply familiar with it.

The main reason we can’t participate now is because our exposure to traditional assets is already substantial. Before you matured, I fully understood what you were doing—but we couldn’t step in.

That’s called the early stage. Once that stage passes and the market matures, everyone naturally gets involved.

Joe Zhou: What similarities do you see between traditional finance and crypto in terms of research strategy?

Fu Peng: Once we enter the second stage, everything will be fully integrated. To put it simply, there will be no difference.

Because digital assets are fundamentally just another asset class—not something existing independently outside the traditional system. They will eventually be absorbed into the traditional financial infrastructure.

For traditional finance, it’s merely adding a new asset class, so the research methodologies are compatible. For example, if I manage FICC + Crypto, my past experience can directly apply to crypto assets. (Note: FICC refers to Fixed Income, Currencies, and Commodities.)

But in the early stage ten years ago, the decades-old large-scale asset trading wisdom had zero relevance.

Think about HKEX—if you tried to trade stocks there in the 70s or 80s, discussing macroeconomics and asset allocation would have been nonsense.

Back then, it was purely “Fang Zhanbo” gameplay: how many chips you had, how many I had, you attack me, I attack you. Trying to discuss asset allocation in that era was absurd.

So it’s ultimately a matter of timing. Now, the moment has arrived.

The Ceiling of Bitcoin: Limited Supply Constrains Allocation Scale

Joe Zhou: If we include Bitcoin in an asset portfolio, what would come before and after it? For instance, ranked by volatility?

Fu Peng: If you want to amplify volatility, go for Ethereum. Further up, choose value-oriented assets like AI stocks in the U.S. market.

This is essentially a chain of assets: Nvidia at the front, Ethereum in the middle, Bitcoin at the back. Amplify the volatility at the denominator end, and you get Ethereum. The largest allocation is likely still at the front—like Nvidia.

If you're managing assets, you'll always allocate the biggest portion to the most certain, lowest-volatility asset. Bitcoin is increasingly becoming the most reliable asset within the crypto portfolio.

Joe Zhou: Will Bitcoin's share in portfolios keep growing, like Nvidia?

Fu Peng: Let me ask you: commodity derivatives have evolved for 50 years. Through futures, options, ETFs—what’s their share in Wall Street portfolios?

The ratio is indeed growing, but what’s the upper limit? Ultimately, it’s a scale issue.

Bitcoin maintains value through capped supply. But every coin has two sides.

On one hand, limiting supply preserves value; on the other, it creates constraints. Stocks are different—the entire equity market keeps issuing IPOs, and theoretically, total market cap can keep expanding. As long as wealth creation continues, the stock market can absorb new assets.

Bitcoin isn’t like that. Its fixed supply means its future allocation scale within portfolios could be constrained.

Joe Zhou: So can I understand it this way: Bitcoin’s current market cap is around $1 trillion, while Nvidia is $4 trillion. If you currently underweight it, but Bitcoin also reaches $4 trillion, don’t you think it can still rise further?

Fu Peng: Simple. You keep circling back to the originalist mindset of the first decade.

How could it? $4 trillion is just two to three times the current value. Based on today’s valuation, Bitcoin going from $1T to $4T is roughly two to three times—translated, each BTC would be around $300K–$400K.

Then could I also say, since Bitcoin’s supply is finite, all value could theoretically converge onto it, pushing prices to the moon—even $1M per BTC? Sure, you can say that, but the fundamental logic is flawed.

You can imagine Bitcoin as a stock.

Can Nvidia reach $50 trillion market cap? Impossible. Can it hit $8 trillion? Possible.

Suppose Nvidia hits $8 trillion. If future performance declines, won’t the stock fall? Of course. But when would it not fall despite declining earnings? It could buy back and cancel shares, reducing supply to boost per-share value. You can think of Bitcoin similarly.

Joe Zhou: But Bitcoin has a fixed supply. Why wouldn’t prices keep rising as more money flows in and more people buy?

Fu Peng: The answer is simple: precisely because it’s limited, sustained mass buying isn’t feasible. For example, as an asset manager, adding a percentage point to your allocation is possible—but increasing further becomes difficult.

Joe Zhou: So Bitcoin can’t double again?

Fu Peng: Impossible. Its capacity is limited. Like copper—do you think any major asset manager would pour billions or tens of billions into copper? If they did, they’d become the dominant force affecting copper prices.

Bitcoin is the same. Its fixed supply sets a hard ceiling on allocable scale.

No Faith, Only Asset Allocation

Joe Zhou: Do you hold crypto assets?

Fu Peng: Our concept of "holding" differs from yours.

Joe Zhou: Don’t you use centralized or decentralized exchanges?

Fu Peng: Our initial involvement was mainly due to compliance. We first engaged with Bitcoin futures—because they’re compliant. The tools you used back then were non-compliant. Products like those offered by Southern Eastern Finance in Hong Kong are acceptable. Another option is investing in Bitcoin ETFs.

Joe Zhou: There’s a key difference here. Retail investors buy coins directly on exchanges; institutions prefer ETFs.

Fu Peng: I think the real distinction isn’t there. The real difference is: what you call "faith," to me, is just an asset.

For example, buying an ETF gives me indirect exposure. I don’t need to obsess over having a wallet address with coins inside.

To me, it’s straightforward. Suppose I predict Bitcoin will reach $80,000—should I sell? I just reduce my ETF position. I adjust the portfolio.

I don’t care about losing "my coins" in the wallet. That’s the difference.

For us, this is simply adding a new investable asset class to our portfolio. It’s entirely different from the faith-driven "holding" mentality of old-school crypto circles.

For traditional finance practitioners, Bitcoin doesn’t need special belief—it doesn’t require direct on-chain wallet ownership. It starts as an asset class suitable for investment portfolios.

Price rises? Sell. Change in outlook? Rebalance. Better opportunity? Shift capital. This logic is simple. The key isn’t whether you believe in Bitcoin, but how you position it within your overall portfolio.

Bitcoin can be a faith—but to me, it’s first and foremost an asset.

Why Does BTC Drop Even After Fed Rate Cuts?

Joe Zhou: From your research perspective, what factor has the strongest relationship with the crypto market—is it profit-related?

Fu Peng: Simple. If crypto assets become investable and are absorbed into the financial framework developed over the last 40 years as a distinct asset class, they’ll inevitably experience "resonance"—i.e., correlation.

Their entire transaction framework will merge with traditional finance.

For crypto assets, the biggest drivers are no longer simple supply-demand dynamics or monitoring wallets and addresses. It’s no longer about who’s dumping or hoarding.

Recall early Hong Kong stock market “Great Era.” Back then, macroeconomic analysis wasn’t necessary—macro wasn’t the core variable. The core was circulating float: how many shares you had, how many I had, how many Fang Zhanbo had. Everyone sat at computers, shorting positions, competing on chip count.

Early Chinese stock markets were similar. When insiders gambled, macroeconomic research was irrelevant—because no large financial institutions were involved. That’s precisely the state of early crypto and early crypto assets.

But now it’s different. Look at today’s Hong Kong market—can Alibaba or Tencent still be traded like that? Maybe on micro-cap stocks, yes—but not for large assets.

Now macroeconomic factors and liquidity start to matter. Because these affect large portfolios, which in turn affect individual assets.

Crypto assets today exhibit this trait. Many now recognize that AI stocks, Nvidia, and other AI-related assets are beginning to resonate with crypto. Liquidity pressure on valuations and traditional analysis paths are already impacting crypto.

That’s the answer.

Joe Zhou: So what’s the current macro impact on crypto markets? What’s the prevailing condition?

Fu Peng: Since November last year, liquidity has tightened.

Around November, the Fed’s balance sheet contracted to a certain degree. Note: "contracted to a certain degree"—this causes a squeeze in liquidity at the quantity (Q) level.

Ordinary people think rate cuts should help assets—but they overlook that liquidity isn’t just about interest rates; it’s also about money supply.

When balance sheet contraction reaches a threshold, it offsets the liquidity expansion from rate cuts, resulting in tighter overall liquidity. At that point, valuation-sensitive assets face immediate pressure.

This logic has already been proven in traditional assets—over the past six to seven years, it’s happened twice, both times impacting crypto. Hence, you can see how the market has evolved.

Joe Zhou: When do you think this bearish cycle ends?

Fu Peng: I told you earlier this year—by year-end.

Consider this: if liquidity becomes the dominant market driver, your timing must align with that inflection point. Timing correctly is crucial.

For Fu Peng, understanding today’s crypto market requires moving beyond chain data, exchange fund flows, and whale holdings.

As Bitcoin becomes an asset class increasingly incorporated into institutional portfolios, it inevitably falls under the influence of traditional finance.

Rate cuts don’t guarantee liquidity easing. Lower interest rates don’t mean all assets rise. The interplay between money supply and funding cost is now a critical variable in crypto valuation.

Crypto is increasingly resembling traditional financial markets. While the era of chip-based speculation hasn’t vanished completely, for ever-larger assets, macroeconomic conditions and liquidity are unavoidable variables.

AI Era: Young People Can Become Solo Hedge Funds

Joe Zhou: How will AI trading impact the FICC + Crypto market?

Fu Peng: It’s simply the evolution of AI Trading Agents. It will transform the entire investor structure.

Simply put, retail investors will be eliminated faster. And one thing is certain: today’s Gen Z, if they work hard, could rapidly evolve into “solo hedge funds.” Because AI drastically lowers efficiency and cost. Previously, retail traders couldn’t become professionals—but now, young people have a real shot.

Conversely, those completely ignoring AI will be quickly eliminated. So it’s a two-sided divergence.

AI will inevitably result in: a generation of young people becoming solo hedge funds, while established institutions grow stronger.

Future competition among institutions won’t be about “judgment”—it’ll be about who has more data, rarer data, and stronger computing power. If you’re willing to spend $1 billion on backend servers, data maintenance, and compute infrastructure, you’ll outperform other hedge funds.

Did you think Renaissance Technologies’ legendary returns came from “judgment”? It was the computer age.

In the algorithmic trading era, while you were still learning, I could already trade via machines—you manually filled orders. I’d make money from you. That was a different era.

Joe Zhou: Will the market become more monopolized by giants?

Fu Peng: Yes. Eventually, direct retail participation will drop sharply. You’ll have to become ultra-low-frequency asset allocators. If you attempt high-frequency trading, you’re doomed. This is historical trend.

Joe Zhou: After AI emerges, will your asset allocation or business model change?

Fu Peng: No change. We simply add another asset class—nothing else shifts.

Joe Zhou: What about your research approach?

Fu Peng: That will change. Middle-tier analysts lose meaning; even end-stage order execution becomes obsolete. Your AI Trading Agent handles it all.

Joe Zhou: How does this affect you personally?

Fu Peng: Already like that. Not just me—many veteran funds in London are cutting staff. The middle layer has no value anymore. We conduct macro industry analysis daily—formerly reliant on humans, now we have 17 AI employees.

Joe Zhou: If you were to give young investors asset allocation advice today, what would you say?

Fu Peng: Come on—what asset allocation do young people need? That’s like Xiao Deng asking me: “I have $200,000—how should I allocate?” My answer? Just go all-in.

Simple: asset allocation only makes sense once you have sufficient capital, based on risk appetite, return expectations, etc.

Joe Zhou: Let me paint a profile: urban white-collar workers with modest savings—what would you suggest for crypto allocation?

Fu Peng: First, pay off debt, reduce leverage, secure job cash flow—don’t get replaced by AI. Then, worry about where to invest. Never use credit cards or small loans to gamble on volatile assets—I promise you, it’s a disaster. Don’t do it.

Joe Zhou: But then the market would be boring—becoming super efficient.

Fu Peng: But the market itself is a process of elimination. You know, it’s also a wave of elimination.

The Real Value of Crypto: Fu Peng on Stablecoins, RWA, and Polymarket

Joe Zhou: There will surely be new developments making the market less dull.

Fu Peng: Polymarket isn’t that interesting? Same as before (laughs).

Joe Zhou: Do you play it?

Fu Peng: Seriously—do I need to play? Back in the UK, didn’t we bet on football matches too? Same thing. But “we bet” and “you bet” are completely different.

Back then, internet speed was slow—we used walkie-talkies, bought tickets, sat in stadiums, exploited time delays. The platform had latency—goal updates took about 90 seconds. That’s arbitrage.

Joe Zhou: What’s your take on stablecoin market potential?

Fu Peng: Ultimately, stablecoin share will mirror the diversified foreign exchange reserves seen in countries—basically, the proportion of currencies used in financial systems.

Stablecoins are just a technical tool. You can view them as replacing the middle layers of finance—trade, transaction, payment—transitioning from legacy financial systems and fiat currencies to tokens pegged to national currencies.

Joe Zhou: Between stablecoins and CBDCs, which do you favor?

Fu Peng: In the end, stablecoins will be the benchmark.

Joe Zhou: What’s your view on RWA?

Fu Peng: Just a tool—doesn’t matter. You can attach anything to it. Like blockchain—it’s a tool, applied in finance as a concept. For example, in trade, there are tons of documents prone to fraud—blockchain tech can prevent that.

Technological tools produce “assets,” but RWA isn’t an asset—it’s a tool.

Joe Zhou: What’s your take on Hong Kong’s RWA innovation?

Fu Peng: The most effective RWA today is actually stablecoins.

Many traditional assets want to enter via RWA, issuing non-standard, long-tail assets. But the question remains: what’s the real advantage over buying other assets?

Joe Zhou: What if gold—a highly liquid asset—is tokenized as RWA?

Fu Peng: Meaningless. Gold is already highly marketized and competitive, with excellent liquidity—no need to layer RWA on top.

Technology must find its true application. Don’t assume existing, mature asset scenarios can automatically fit RWA. The winners will emerge where traditional finance hasn’t yet reached.

Why Join Newfire Now? Digital Assets Are Entering the FICC+C Era

Joe Zhou: Why did you choose to join Newfire?

Fu Peng: Simple. All regulations and technological advances in 2025 signal the dawn of a new era—similar to the rise of FICC in the 1980s. After WWII, the first major fusion between finance and tech occurred in the 1980s. The second will be this one.

The FICC era represented a shift from tradition to a new world. It’s nearly ready—just needs someone to break the final barrier and ignite the fire.

Joe Zhou: What advantages does Newfire Group have during this transition?

Fu Peng: Simply put—right choice.

First stage: retail characteristics. Early on, we joked it wasn’t “barbaric,” but certainly unstructured. That unstructured phase has passed. Over the past decade, global regulation and compliance have brought it to a close.

Second stage: exchanges. Historically, exchanges are no longer as valuable as modern asset management.

Naturally, exchanges will first flourish in diversity, then undergo massive consolidation. Personally, signs of this consolidation are already visible. Look at traditional exchanges like NYSE and Nasdaq—they’re already present. Traditional exchange integration and convergence have already started.

Joe Zhou: What’s your view on crypto’s future?

Fu Peng: Look—traditional exchanges are rapidly evolving and entering the scene. History repeats: multiple exchanges, homogenized offerings, eventually leading to large mergers and acquisitions, leaving only a few global giants. Poor-quality assets fade away.

Exactly the same. Don’t think crypto is special—this mirrors the 50-year-old cycle.

Joe Zhou: Will you get a 9 license in Hong Kong and trade directly?

Fu Peng: Getting old. Aren’t there already people here? Just bring up the younger generation. Why would someone my age still stare at the market? Afraid of stroke? At this stage, you should emulate Dalio—pass the torch, let youth lead, but transfer all your knowledge and experience.

Joe Zhou: Joining Newfire now implies major changes in the industry?

Fu Peng: Finance evolves with technological change.

China, Hong Kong, and Crypto’s Future: A Long Transition Between Old and New

Joe Zhou: How do you view China’s economic trends over the past two years?

Fu Peng: Not just China—globally, the view is similar: a period of transition between old and new.

Traditional production relations and industries face challenges, while innovative sectors are booming. Domestically, if you’re into AI, artificial intelligence, data, computing power, robotics—you won’t feel things are bad. But if you’re in real estate or traditional manufacturing, you might feel crushed and overwhelmed.

Which is right? Neither. Both coexist.

So we’re in a “both old and new” phase. From the new angle, you say: “We’ve completed structural reform and are moving forward.” From the old angle, you ask: “Who will save me?” (laughs). This contradiction is inevitable.

Even America went through this. By 2015–2016, it was in a similar state. After the 2008 subprime crisis, financial leverage had to be reduced—those de-leveraged industries suffered. Meanwhile, new industries emerged. In 2015–2016, Cathie Wood’s “disruptive innovation” sectors were still early—those areas performed well.

Joe Zhou: Is China’s crypto and financial innovation culture stuck?

Fu Peng: Financial innovation is innovation. Technological innovation is also innovation.

Western path: if no law exists, act first, then fill gaps—boldly move forward. Asian path: I must confirm the activity is safe, someone takes responsibility, others have already moved—then I copy.

Joe Zhou: Under such cultural differences, how can we better advance crypto development?

Fu Peng: Who drives it?

Joe Zhou: Hong Kong.

Fu Peng: Hong Kong is the middle ground. It’s essential—otherwise, efficiency lags, and we risk being left behind. I must follow. But I can’t be as open as the U.S.—letting liberalism spread freely. I can’t do that either.

So Hong Kong sits perfectly in the middle—between East and West civilizations. Not as conservative as the inside, not as open as the outside. Efficiency isn’t as high as outside, nor as low as inside—just right in the middle.

Joe Zhou: Do you think mainland China will liberalize eventually?

Fu Peng: No. I’ve already explained systematically. Cultural values differ between East and West—innovation pathways diverge. West: if no law, act first, then fix. Asia: I must confirm safety, wait until others pave the way, then replicate.

Joe Zhou: Will a renminbi-backed stablecoin eventually be approved?

Fu Peng: Yes—but it will take a long time. It will be a continuous exploration, watching others fall into pits, then following suit.

Author: Zhou Zhou, Foresight News; Image: Fang Zhanbo (left) from "The Great Era," portrayed by Anthony Wong