Fu Peng's extensive interview: I have no faith in BTC, the four-year cycle of Bitcoin has already ended

Interview & Article: Joe Zhou, Foresight News

"I have no faith in BTC."

"Brother Ma Ji will definitely go bankrupt, assets will gradually dwindle, and the era of retail investors is over."

"I don't believe Bitcoin will double again."

"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 cryptocurrency will have no differences in research strategies."

"Gold itself is already highly marketized and does not need another set through RWA."

"I am optimistic about young people today starting one-person hedge funds."

Half a year later, two interviews, totaling six hours. In my conversations with Fu Peng, I heard a lot of clear and direct judgments.

As one of the earliest economists in China to publicly focus on the cryptocurrency industry, Fu Peng has his own independent understanding of BTC, stablecoins, RWA, and the entire crypto market.

From Lehman Brothers in the UK to Solomon International Investment Group in London, and then to Chief Economist at Northeast Securities and Chief Economist at New Fire Group, Fu Peng has experienced different financial market cycles and has continually changed his professional identity.

But he says he has never changed.

In the interview, he repeatedly emphasized not to pay too much attention to those changing titles. For the past thirty years, he has always done one thing.

What exactly is this thing?

In the interview, we talked about Bitcoin, stablecoins, RWA, Polymarket, AI, the current state of the cryptocurrency industry in Hong Kong, and the future of retail investors. Below is the main text of the interview:

01｜The crypto world is not what it used to be

Joe Zhou: I attended the 2026 Hong Kong FinTech Week the day before yesterday and found that crypto companies account for less than one-tenth of the entire fintech industry. Do you think this situation will change in the future?

Fu Peng: I think the proportion of crypto in the entire asset portfolio will not change significantly. Because its underlying core technology has already begun to integrate with the traditional financial system.

Joe Zhou: Do you think the four-year cycle of Bitcoin still exists?

Fu Peng: It doesn't exist anymore. That was a product of the previous era. Moreover, in our analytical framework, there is no such thing as a four-year cycle.

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

Fu Peng: You have to believe that when a market is still very small, large players selling or buying will certainly affect the price.

But when it enters the portfolio management era, those factors become different. It can't be said that there is no influence at all, but it is no longer sufficient to sway market prices.

Joe Zhou: The volatility will shrink.

Fu Peng: Yes, you are right about that. When institutional forces intervene, volatility will naturally decrease.

Joe Zhou: You previously said that the current crypto world is different from the past.

Fu Peng: This statement will probably make many people uncomfortable. Some will criticize, and some will think. But those who criticize, to put it bluntly, may be gradually eliminated by history in a few years; those who think I find quite good, they will seriously consider it and may find some direction.

Joe Zhou: So what do you think the old crypto world was like? What kind of form will it take in the future?

Fu Peng: Do I still need to imagine what the old crypto world was like?

I just gave you an example, during Fang Zhanbo's time in the Hong Kong stock market, wearing vests and shouting orders on-site, right? It's exactly the same. The proportion of retail investors was extremely high, chip trading, speculative trading, and high volatility were all characteristics of that era.

Fang Zhanbo in "The Great Era" (left), played by Liu Qingyun

If you look at China, what was it back then? Hainan Commodity Exchange. Coffee, red beans, green beans, white sugar, sorghum… I don't know if you experienced it, but back then we had countless exchanges, each province had them. We had OTC stock trading exchanges and various commodity exchanges. Isn't that exactly the same as the later crypto world? A bunch of exchanges, a bunch of altcoins, various small varieties, no difference at all.

So, for those of us who have experienced those things, it's not that we don't understand this circle, but that we understand it very well.

One important reason we can't participate is that our proportion in traditional assets is already very large. Before you mature, I understand very well what you are doing, but we can't get involved.

That's called the early stage. Once the early stage passes and the market matures, everyone can naturally get involved.

Joe Zhou: Do you think there are any commonalities in research strategies between traditional finance and cryptocurrency?

Fu Peng: If it enters the second phase, it will be completely integrated. In simple terms, there will be no differences.

Because digital assets are essentially an asset class, not something independent of the traditional system. Ultimately, it will be incorporated into the traditional system.

For traditional finance, it is equivalent to adding a new asset class, so the research methodology is the same. For example, if I do FICC + Crypto, then past experiences can be completely applied to crypto assets. (Note: FICC refers to fixed income, foreign exchange, and commodity business.)

But if placed in the early stage ten years ago, the large asset trading experiences formed over the past fifty years had no significance at that time.

Think about the Hong Kong Stock Exchange; if it were trading stocks in the 70s or 80s, talking about macroeconomics and asset allocation would be nonsense, right?

That era was all about "Fang Zhanbo" style: how many chips you have, how many chips I have, you do me, I do you. In that era, if you went to talk about large asset allocation, it would be ridiculous.

So, this is actually a choice of era. Now, the time has come.

02｜The ceiling of Bitcoin: Limited supply also restricts allocation scale

Joe Zhou: If Bitcoin is placed in an asset portfolio, what would be the assets before and after it? For example, arranged by volatility.

Fu Peng: If you want to amplify volatility, choose Ethereum. Going further up, select value assets, like AI stocks in the US market.

This is actually a chain of assets: at the front is Nvidia, in the middle is Bitcoin, and at the back is Ethereum. If you amplify the volatility at the denominator end several times, it would be Ethereum. The largest share of assets may still be placed at the front, like Nvidia.

If you are doing asset management, you will definitely place the largest position in the most certain and lowest volatility assets. And Bitcoin is gradually becoming the most certain asset in the entire crypto asset portfolio.

Joe Zhou: So will Bitcoin's proportion in the asset portfolio increase in the future? Like Nvidia?

Fu Peng: Let me ask you a question: commodity derivatives have developed for 50 years now. Whether through futures, options, or ETFs, what proportion can it account for in the entire Wall Street investment portfolio?

This proportion is indeed increasing, but how much can the total proportion reach? To put it bluntly, it’s still a scale issue.

Bitcoin maintains its value through limited total supply. But everything has two sides.

On one hand, controlling the quantity can maintain value; on the other hand, it can also bring restrictions. The stock market is different; the entire stock market can continuously IPO, and the theoretical total market value can keep expanding. As long as humanity continues to create wealth, the stock market can absorb new assets.

Bitcoin is not like that. Its quantity is limited, which means that in the future, its scale proportion in the entire asset allocation may be constrained.

Joe Zhou: So can I understand this way: Bitcoin's current market value is about 1 trillion USD, and Nvidia is 4 trillion USD. Now you allocate a little less, but if Bitcoin also rises to 4 trillion USD, don’t you think it can continue to rise?

Fu Peng: It's very simple; you keep going back to the early ten years of fundamentalist concepts.

How is that possible? 4 trillion USD is actually just two or three times. Based on the market value at that time, Bitcoin rising from over 1 trillion USD to 4 trillion USD is roughly two or three times, which translates to about 300,000 to 400,000 USD per Bitcoin.

So can I also say that because Bitcoin's total supply is limited, theoretically all value can accumulate on it, and the price can skyrocket, even to 1 million USD per coin? Such statements are just for talk; the underlying logic is fundamentally wrong.

You can think of Bitcoin as a stock.

Can Nvidia reach a market value of 50 trillion USD? Impossible. But can it reach 8 trillion USD? Possible.

Assuming Nvidia reaches 8 trillion USD, if its future performance declines, will its stock price drop? Of course. Under what circumstances, even if performance declines, might the stock price not drop? It can buy back and cancel stocks, reducing the number of shares to enhance per-share value. You can understand Bitcoin as this concept.

Joe Zhou: But isn't Bitcoin's total supply limited? Why wouldn't the price continue to rise due to continuous inflows of funds and continuous buying?

Fu Peng: The answer is simple: precisely because it is limited, there won't be a situation where everyone keeps buying. For example, as an asset manager, increasing a percentage in allocation is possible, but adding more becomes difficult.

Joe Zhou: So Bitcoin can't double again?

Fu Peng: Impossible. Because its capacity is limited. Just like copper, which large asset management company do you think would buy all their tens of billions or hundreds of billions of dollars in copper? If they really did that, they would become the biggest factor affecting copper prices.

Bitcoin is the same. Its total supply is limited, and the scale of allocation it can bear also has boundaries.

03｜No faith, only asset allocation

Joe Zhou: Do you hold crypto assets?

Fu Peng: Our "holding" is a different concept from your "holding."

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

Fu Peng: We participated early on, mainly due to compliance issues. The first thing we got involved with was Bitcoin futures because they were compliant. The things you used in those exchanges were non-compliant. Products from Southern Eastern Hong Kong can be participated in. There is also a way, for example, I can allocate Bitcoin ETFs.

Joe Zhou: There is a difference here. For example, we retail investors directly buy coins from exchanges; but financial institutions may prefer to buy ETFs.

Fu Peng: I think the real difference is not here. The real difference is: what you call "faith" is just an asset to me.

For example, if I buy an ETF, I can indirectly hold this asset. I won't be like many people, insisting on having an address, a wallet, and having coins inside.

For me, it's very simple. Suppose I judge that Bitcoin will rise to 80,000 USD, should I sell? I can just reduce my ETF position, adjust the asset portfolio.

I won't be obsessed with saying, "If I reduce my position, does that mean I have nothing in my wallet?" No, that's not the case. This is the difference.

For us, this is called adding an investable asset class in asset allocation. This is completely different from the faith-colored "holding" of the old crypto world.

For traditional finance practitioners, Bitcoin does not need to be endowed with some special faith, nor does it necessarily have to be directly held through an on-chain wallet. It is primarily an asset that can be included in an investment portfolio.

When the price rises, you can reduce your position; if the judgment changes, you can adjust the allocation; if better investment opportunities arise, you can also transfer funds to other assets.

This logic is not complicated. What matters is not whether you believe in Bitcoin, but how you assess its position within the entire asset portfolio.

Bitcoin can be a belief, but for me, it is primarily an asset.

04｜Why Does BTC Still Drop When the Federal Reserve Cuts Interest Rates?

Joe Zhou: From your research perspective, what factors have the greatest relationship with the crypto market? Is it related to profits?

Fu Peng: It's simple. If crypto assets become investable assets, integrated into the financial framework developed over the past 40 years, as an asset class, then there will definitely be "resonance," also known as correlation.

The entire framework logic of asset trading will merge with traditional finance.

For crypto assets, the most significant influences are no longer just simple supply and demand relationships, nor is it about how much inventory is available in which address or wallet.

Think about the "Great Era" of Hong Kong stocks in the early years. At that time, there was no need to study macroeconomics because macroeconomics was not the core variable. The core variable was how many circulating shares there were, how many you held, and how many Fang Zhanbo held. Everyone sat in front of their computers, typing away, sniping at prices, competing over who had more chips in hand.

The early Chinese stock market was the same. When speculators were gambling, there was no need to study macroeconomics because there were no large financial institutions involved at that time. This was the situation in the crypto space a few years ago.

But now it's different. Look at today's Hong Kong stocks; do stocks like Alibaba and Tencent still trade in the same way as back then? There are certainly still penny stocks, but for large assets, that is no longer the case.

At this point, you will find that macroeconomics and liquidity have started to become important. Because these factors will affect large asset portfolios, and these portfolios will, in turn, affect the specific assets within them.

Today's crypto assets have already acquired these characteristics. Many people have also begun to notice that AI stocks, Nvidia, and other AI-related assets are resonating with crypto assets. The pressure of liquidity on valuations and traditional analytical paths have begun to influence crypto assets.

That is the answer.

Joe Zhou: So what is the current macro environment's impact on the crypto market? What is the market situation from a macro perspective?

Fu Peng: Since November last year, liquidity has been tightening.

Around November last year, the Federal Reserve's balance sheet contracted to a certain extent. Note that it "contracted to a certain extent," which will bring about a squeeze on liquidity at the quantity (Q) level.

Ordinary people might think that the Federal Reserve cutting interest rates should be good for assets, but they overlook that liquidity is not just a matter of interest rate pricing; there is also a monetary quantity issue.

When the scale of balance sheet reduction contracts to a certain extent, it will offset the liquidity abundance brought by interest rate cuts (P), and overall liquidity will actually tighten. At this time, all valuation-related assets will be the first to be squeezed.

This logic has already been validated in traditional assets. It has happened twice in the past six or seven years, and both times it affected crypto assets. So you can see how the market has changed in recent years.

Joe Zhou: When do you think this cycle will end? Specifically, the bearish cycle.

Fu Peng: I told you in the first half of the year, it will be by the end of this year.

Think about it; if liquidity gradually becomes the biggest factor affecting the market, then your "timing" must be chosen at that point. The timing point must be correct.

In Fu Peng's view, understanding today's crypto market can no longer focus solely on on-chain data, exchange fund flows, and large holder positions.

As Bitcoin gradually becomes an asset that can be included in large institutions' portfolios, it will inevitably be influenced by the traditional financial system.

A rate cut does not necessarily mean liquidity is easing, and a decrease in interest rates does not mean all assets will rise. The relationship between monetary quantity and funding prices is becoming an important variable affecting the valuation of crypto assets.

The crypto space is becoming increasingly similar to traditional financial markets. The era of chip-based speculation has not completely disappeared, but for more and more large assets, macroeconomics and liquidity have become unavoidable variables.

05｜In the AI Era, Young People Can Become One-Person Hedge Funds

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

Fu Peng: It's actually the process of AI Trading Agents. It will change the entire structure of investors.

In simple terms, retail investors will be eliminated faster. And one thing is certain: now that the post-2000 generation is here, if they work hard, they could quickly become "one-person hedge funds." Because AI as a tool has drastically reduced efficiency and costs. It was difficult for retail investors to become professional institutions in the past, but now young people have hope.

Conversely, another group of people who do not use AI at all will also be quickly eliminated by the market. So it is a bifurcation.

AI will definitely lead to one result: a group of young people will become one-person hedge funds; at the same time, the financial institutions above will become stronger.

When these financial institutions compete in trading in the future, they will not be competing on "judgment," but on who has more data, who has rarer data, and who has stronger computing power. If you are willing to spend a billion to build backend servers, maintain data, and maintain computing power, you will be stronger than other hedge funds.

Did you think the wealth miracle created by the Grand Prize Fund back in the day was achieved through "judgment"? That was the era of computers.

In the era of programmatic trading, when you all still didn't know how to use it, I simply came in— I used computer trading while you were filling out orders manually, and I could definitely make money off you. That was an era.

Joe Zhou: Do you think it will become increasingly monopolized by giants?

Fu Peng: Yes. The final result is that the proportion of retail investors directly participating in the market will significantly decrease. In other words, you must become a super low-frequency asset allocator. If you even think about doing high-frequency trading, you will undoubtedly fail. This is a historical trend.

Joe Zhou: After the emergence of AI, will your asset allocation or original business model change?

Fu Peng: Not much has changed. We just have one more asset class, that’s all.

Joe Zhou: What about the research methods?

Fu Peng: That will change. The middle-tier researchers will become meaningless, and even the end-stage trading orders will also become meaningless. Your AI Trading Agent has already completed that for you.

Joe Zhou: What about changes for you personally?

Fu Peng: It’s already like that. Don’t talk about me; many old funds in London are laying off people; the middle layer has no value anymore. We are doing macro analysis of the industry every day; in the past, it relied on people to grasp it, but now we have 17 AI employees.

Joe Zhou: If you were to give young investors an asset allocation suggestion now, what would you say?

Fu Peng: Come on, what asset allocation do young people need? Isn’t it just like when Xiao Deng comes to ask me: "I have 200,000, how should I allocate my assets?" I say, why not just go all in?

It's simple; asset allocation must be based on a certain asset scale, and then determined according to your risk preference, expected investment return, etc.

Joe Zhou: Let me create a user profile for you: for someone like us working in a first-tier city with a bit of assets, how much do you think should be allocated to crypto assets?

Fu Peng: First, pay off your debts, reduce leverage, maintain your job's cash flow, and don’t get replaced by AI. With the remaining money, think about what to invest in. Absolutely do not swipe your credit card or take out small loans to play with high-volatility assets— I can tell you, that’s a super bad idea. Do not do that.

Joe Zhou: But if that’s the case, the market will be very boring. It will become a super efficient market.

Fu Peng: But the market itself is also a wave of elimination. You must understand, it is also a wave of elimination.

06｜Where Is the Real Value of Crypto? Fu Peng's View on Stablecoins, RWA, and Polymarket

Joe Zhou: I believe there will definitely be new things emerging that will make the market less boring.

Fu Peng: Right now, that Polymarket, don’t you find it quite interesting? It’s the same (laughs).

Joe Zhou: Do you play it too?

Fu Peng: Damn, do I need to play it? Back when we were in the UK, didn’t we also bet on football? It’s the same. But what I mean by "we bet" and "you bet" is completely different.

Back then, the internet wasn’t that fast; we had walkie-talkies and bought tickets, right at the stadium, and then made time differences— that trading platform had delays, and after a goal, the odds would only update about a minute and a half later. That’s called arbitrage.

Joe Zhou: What do you think about the future market for stablecoins?

Fu Peng: In the end, the proportion of stablecoins will be similar to the diversified foreign exchange reserves of various countries that you see now— that is, the currencies used in the financial system.

Stablecoins are just a technical means. You can understand that our financial middle layer, which includes trade layers, transaction layers, and payment layers, is merely transforming from the original financial system and original currency into stablecoins anchored to various national currencies.

Joe Zhou: Which do you prefer, stablecoins or CBDCs?

Fu Peng: In the end, it will definitely be based on stablecoins.

Joe Zhou: What do you think about RWA?

Fu Peng: It’s just a tool, it doesn’t matter. You can add anything to it. Just like blockchain, it is a tool; when applied in finance, it is a concept. For example, there used to be a lot of documents in trade, and to prevent forgery, blockchain technology can still be applied.

The tools formed by technology ultimately become "assets"; RWA is not an asset, it is a tool.

Joe Zhou: What do you think about RWA innovation in Hong Kong?

Fu Peng: The most effective RWA right now is actually stablecoins.

Many traditional assets want to squeeze in and use RWA to issue those non-standard, long-tail assets. But the problem is: what are the benefits of buying these assets compared to buying other assets?

Joe Zhou: What if we use a highly liquid asset like gold for RWA? For example, tokenizing gold?

Fu Peng: It’s meaningless. Gold itself is already a highly marketized and highly competitive asset; its liquidity is good enough, and there’s no need to go through RWA again.

Technology must find its true application scenarios; don’t think that existing, mature asset scenarios can naturally fit into the RWA shell. What can emerge is often in areas that the existing financial system cannot cover.

07｜Why Join New Fire Now? Digital Assets Are Entering the FICC+C Era

Joe Zhou: Why did you choose to join New Fire?

Fu Peng: It’s simple. The regulations and technological advancements in 2025 will signal a moment similar to the rise of FICC in the 1980s. After World War II, the first major integration and change of finance and technology was in the 1980s. The second time should be this one.

The FICC era represented a transition from the traditional to a new world. It ignited completely. The two sides moving toward the center actually just need someone to break through that last layer of paper to ignite this fire.

Joe Zhou: What advantages do you think New Fire Group has during this transition?

Fu Peng: I think it’s about choosing correctly.

You see, the first phase is characterized by retail participation. In the early days, we joked that while it couldn’t be called "barbaric," it was indeed extensive development. That phase of extensive development has actually passed. Over the past decade, with the advancement of global regulation and compliance, that phase has ended.

The second is exchanges. According to historical experience, the path of exchanges is far less effective than the asset management we are doing now.

Of course, the final exchanges will first flourish in diversity and then undergo a major merger. Personally, I believe the signs of a big merger have already begun to appear. Look at the traditional New York Stock Exchange and Nasdaq; they are already on-site. The access and integration of traditional exchanges have actually already started.

Joe Zhou: What do you think about the future of the cryptocurrency industry?

Fu Peng: If you look, traditional exchanges are also rapidly iterating and entering the market. Historically, there have been many exchanges that became homogenized, and in the end, there was a major merger and acquisition, leaving only a few of the largest globally. Meanwhile, inferior assets gradually disappeared.

Exactly the same. Don't think there is anything special about the crypto circle; it is no different from what happened 50 years ago.

Joe Zhou: Will you take a number 9 license in Hong Kong and directly operate?

Fu Peng: I'm getting old. Aren't there young people here? Just bring them up. Why would I still be on the front lines at this age? Aren't you afraid of a stroke? At this age, just like Ray Dalio—you need to pass on your knowledge and let the young people take over, but you have to give them your experience and everything you have.

Joe Zhou: Does joining New Fire at this time mean that there have been some significant changes in the industry?

Fu Peng: Finance changes with technological advancements.

08｜The Future of China, Hong Kong, and Crypto: A Long Transition Between Old and New

Joe Zhou: What do you think about the development trend of China's economy in the past two years?

Fu Peng: It's not just China; the view is generally the same worldwide. In summary: a transition between old and new.

Traditional production relationships and industries are facing various problems, while innovative things are very popular now. The same goes for the domestic scene—if you are involved in AI, artificial intelligence, data, computing power, or robotics, you definitely won't feel that things are bad right now. But if you are in real estate or in traditional production relationships and traditional manufacturing, you might feel that things are very competitive and tough.

Which is right and which is wrong? There is no such thing. Both coexist.

So now is a stage where "the new is present, and the old is also present." If you stand from a new perspective, you would say, "We have completed structural reforms and are moving forward"; from an old perspective, you would ask, "Who will save me?" (laughs). This kind of contradiction is inevitable.

Actually, the same was true for the United States back then. By 2015 and 2016, it was in this state as well. After the 2008 subprime mortgage crisis, the leverage in the financial system had to be removed, and those industries that de-leveraged were naturally in a bad state. Meanwhile, new industries were being born. In 2015 and 2016, the industries that "disruptive innovation" mentioned by Cathie Wood were still in their early stages, and that part was doing well.

Joe Zhou: Is it difficult for China's crypto and financial industry to break through the innovation culture?

Fu Peng: Financial innovation is also a form of innovation, and technological innovation is also a form of innovation.

In the path of innovation, the West operates under the principle that if there is no law, you proceed first and then fill in the gaps later, boldly moving forward. In Asia, I must first confirm that there are no issues, and someone is willing to take responsibility; once others have mostly done it, then I will copy it.

Joe Zhou: In light of this cultural difference, how can we better promote the development of the crypto industry?

Fu Peng: Who will promote it?

Joe Zhou: Hong Kong.

Fu Peng: Hong Kong is in the middle. It's simple; you have to follow. If you don't follow, you might be left behind, so I have to follow. But I can't be completely open like the Americans, letting liberalism spread first; I can't do that.

So Hong Kong is just in the middle. Between Eastern and Western civilizations, it is neither as conservative as the inside nor as open as the outside. Its efficiency is neither as high as the outside nor as low as the inside; it is just in the middle.

Joe Zhou: Do you think it will be opened up domestically in the future?

Fu Peng: No. I have already explained it systematically. The values of Eastern and Western cultures are different, and the paths in innovative practices are completely different. The West operates under the principle that if there is no law, you proceed first and then fill in the gaps later; in Asia, I must first confirm that there are no issues, and once others have mostly done it, then I will copy it.

Joe Zhou: Do you think the issuance of a stablecoin for the Renminbi will eventually be approved?

Fu Peng: Yes, but it will take a long time. It will definitely be a continuous exploration, watching others navigate the pitfalls first, and then we will follow suit.