Exclusive Interview with Fu Peng: I Have No Faith in BTC, Bitcoin’s Four-Year Cycle Has Ended

Author: Joe Zhou, Foresight News

TechFlow Guide: As one of the earliest macroeconomists in China to focus on crypto assets, Fu Peng systematically analyzed the underlying logic of Bitcoin, its institutional evolution, and shifts in market structure from the perspective of traditional asset class allocation in this 10,000-word exclusive interview.

Fu Peng believes the four-year Bitcoin cycle has ended alongside institutionalization, with finite supply instead limiting the scale it can hold as a macro asset; meanwhile, the explosion of AI technology is reshaping the investor ecosystem, with the amateur era dominated by retail investors accelerating to make way for professional allocation.

"I have no faith in BTC."

"Brother Maji will definitely get liquidated, assets gradually wiped out, the era of retail investors is over."

"I don't believe Bitcoin will go up another 2x."

"The four-year Bitcoin cycle is gone."

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

"In the next phase, there will be absolutely no difference in research strategies between traditional finance and cryptocurrency."

"Gold is already highly commercialized; it fundamentally doesn't need another round of RWA wrapping."

"I believe young people today can become one-man hedge funds."

Six months apart, two interviews, totaling six hours. During my exchanges with Fu Peng, I heard numerous sharp and direct judgments.

As one of the earliest economists in China to publicly cover the crypto industry, Fu Peng holds independent views on BTC, stablecoins, RWA, and the entire crypto market.

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

But he says he has never really changed.

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

What exactly is that thing?

In the interview, we discussed Bitcoin, stablecoins, RWA, Polymarket, AI, the current state of Hong Kong’s crypto industry, and the future of retail investors. Here is the full transcript:

The crypto circle is no longer what it used to be

Joe Zhou: I attended the 2026 Hong Kong FinTech Week two days ago and found that crypto companies make up less than one-tenth of the entire fintech industry. Do you think this will change in the future?

Fu Peng: I don't think crypto's proportion in the overall portfolio of asset classes will change much. Because its core underlying technologies have already begun to integrate with the traditional financial system.

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

Fu Peng: It's gone. That was a product of the previous era. Moreover, our analytical framework never really had a so-called four-year cycle to begin with.

Joe Zhou: But shouldn't it still have some influence?

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

But once it enters the era of portfolio management, these factors change. It wouldn't be fair to say they have zero impact, but they are no longer enough to dictate market prices.

Joe Zhou: Volatility will shrink.

Fu Peng: Yes, you're right on that point. Once institutional forces step in, volatility will naturally decrease.

Joe Zhou: You previously said that today's crypto circle means something completely different from the past.

Fu Peng: This statement probably makes many people uncomfortable. Some will curse, some will reflect. But those who just curse—speaking bluntly—will likely be slowly filtered out by history in a few years; for those who reflect, I think that's great. They will seriously think about it, and might even find some direction.

Joe Zhou: So in your mind, what did the old crypto circle actually look like? And what form will it take in the future?

Fu Peng: Do I even need to imagine what the old crypto circle looked like?

I just gave you an example: the Hong Kong stock market during the era of Fang Zhanbo, where people wore vests and shouted orders live, right? Exactly the same. Extremely high retail participation, chip-based trading, speculative trading, and high volatility were all hallmarks of that period.

Image: Fang Zhanbo (left) in *The Greed of Man*, played by Liu Qingyun

If you transport that to China back then, what was it? The Hainan Commodity Exchange. Coffee, adzuki beans, mung beans, white sugar, sorghum... I'm not sure if you lived through it, but we had countless exchanges, one in every province. We had OTC counter exchanges for stocks and various commodity exchanges. Isn't that exactly the same as the later crypto circle? A pile of exchanges, a bunch of altcoins, all sorts of minor products, no difference whatsoever.

So, for people like us who went through those times, it's not that we don't understand this circle; we actually understand it very well.

The main reason we couldn't participate was that our exposure to traditional assets was already substantial. Before your sector matured, I fully understood what you were doing, but we couldn't jump in yet.

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

Joe Zhou: What commonalities do you see in research strategies between traditional finance and cryptocurrency?

Fu Peng: Once we enter the second phase, they will be completely integrated. Frankly speaking, there will be zero difference.

Because digital assets are fundamentally just an asset class, not something separate from the traditional system. It will ultimately be absorbed by it.

For traditional finance, it's like adding a new asset class, so the research methodologies are inherently compatible. Take me, for instance: if I trade FICC + Crypto, my past experience applies directly to crypto assets. (Note: FICC refers to Fixed Income, Currencies, and Commodities.)

But place that in the early stage ten years ago, and all those large-scale asset trading experiences formed over fifty years ago would have been meaningless then.

Think about the HKEX. If you try to trade stocks using it in the 1970s or 80s, would talking about macroeconomics or asset allocation then just be nonsense?

That era operated on the "Fang Zhanbo" playbook: How many chips do you have? How many do I have? You hit me, I hit you. Back in that era, if you ran around talking about asset class allocation, it was pure madness.

So, this is essentially a choice of eras. Now, the time has come.

Bitcoin's Ceiling: Finite Supply Also Limits Allocation Scale

Joe Zhou: If you put Bitcoin into a portfolio, what would be the assets before and after it? For example, sorted by volatility.

Fu Peng: If you want to amplify volatility, pick Ethereum. Going higher in value, select value-oriented assets, like AI stocks in the US equity market.

It's essentially a spectrum of assets: Nvidia is upfront, Ethereum is downstream, and Bitcoin sits in the middle. Multiply the volatility on the denominator side by a few times, and you get Ethereum. The largest portion of capital would still likely sit upfront, like in Nvidia.

If you manage assets, you will inevitably allocate the largest position to the asset with the highest certainty and lowest volatility. Within crypto, Bitcoin is gradually becoming the most certain asset in the entire portfolio.

Joe Zhou: So will Bitcoin's proportion in portfolios continue to grow in the future, like Nvidia?

Fu Peng: Let me ask you this: Commodity derivatives have been developed for 50 years now. Regardless of whether through futures, options, or ETFs, what percentage of the entire Wall Street portfolio do they account for?

That proportion is indeed growing, but how high can the total share get? Ultimately, it boils down to a capacity problem.

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

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

Bitcoin isn't like that. Its supply is capped, which means its scale proportion in global asset allocation will likely face constraints in the future.

Joe Zhou: So can I understand it this way: Bitcoin's current market cap is roughly $1 trillion, Nvidia's is $4 trillion. You allocate a smaller amount now, but if Bitcoin also climbs to $4 trillion, don't you think it could keep going up?

Fu Peng: Simply put, arguing back and forth like this just drags us back to the fundamentalist concepts of that first decade.

How is that possible? $4 trillion is merely two to three times the current cap. Based on existing valuations, Bitcoin rising from over $1 trillion to $4 trillion is just a 2x to 3x increase, which translates to roughly $300k to $400k per coin.

Could I just say that because Bitcoin's total supply is finite, theoretically all value in the world could accumulate in it, driving the price to the sky, even to $1 million per coin? You can talk about it, but the underlying logic is fundamentally flawed.

Imagine Bitcoin as a single stock.

Can Nvidia reach a $50 trillion market cap? Impossible. But could it hit $8 trillion? Plausible.

Assume Nvidia hits $8 trillion. If earnings drop in the future, will the stock price fall? Of course. Under what circumstances would the stock price not necessarily fall even with declining earnings? It can buy back and retire shares, increasing per-share value by reducing the share count. You can understand Bitcoin under roughly the same concept.

Joe Zhou: But isn't Bitcoin's total supply limited? Why wouldn't continuous inflows of capital and constant buying drive the price up indefinitely?

Fu Peng: The answer is simple: precisely because it's limited, a scenario of perpetual mass buying won't happen. For example, as an asset manager, I can increase allocation by a percentage point, but pushing it further becomes extremely difficult.

Joe Zhou: So Bitcoin can never double again?

Fu Peng: It cannot. Because its capacity is limited. Think of industrial copper. Which major asset management firm would dump billions or hundreds of billions of dollars into copper? If they actually did that, their own entity would become the primary factor influencing copper prices.

Bitcoin is the same. Its total supply is capped, meaning the allocation scale it can accommodate has a hard ceiling.

No Faith, Just Asset Allocation

Joe Zhou: Do you hold crypto assets?

Fu Peng: Our version of "holding" is a completely different concept from yours.

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

Fu Peng: Our initial participation was primarily due to compliance requirements. The first things we touched were Bitcoin futures because they were compliant. The platforms you were using back then were non-compliant. Products from CSOP (Southern Dongying) in Hong Kong can be accessed. Another route is allocating via a Bitcoin ETF.

Joe Zhou: There's a distinction here. Retail investors like us go directly to exchanges to buy coins; but financial institutions might prefer ETFs.

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

For example, if I buy an ETF, that indirectly holds the asset for me. I won't be like many others who insist on having a specific address, a dedicated wallet, and coins sitting inside it.

To me, it's simple. If I anticipate Bitcoin hitting $80,000, should I sell? I'll just reduce my ETF position and rebalance the portfolio.

I never obsess over thinking, "Did I sell off and empty my wallet?" Absolutely not. That's the difference.

For us, this is simply adding a investable asset class to portfolio allocation. It is entirely distinct from the "holding" culture in the old crypto circle, which is tinged with religious-like devotion.

For traditional finance professionals, Bitcoin does not require special faith, nor must it be directly held in an on-chain wallet. Above all, it is an asset suitable for inclusion in a portfolio.

Prices rise, reduce position; thesis changes, adjust allocation; better opportunities arise, shift capital elsewhere.

This logic isn't complex. What matters isn't whether you believe in Bitcoin, but how you judge its positioning within your overall portfolio.

Bitcoin can be a belief, but to me, it starts as an asset.

Why Did BTC Still Fall Despite Fed Rate Cuts?

Joe Zhou: From your research perspective, what factors correlate most strongly with the crypto market? Is it profit-related metrics?

Fu Peng: Simply put. If crypto assets evolve into investable instruments and get absorbed into the financial framework developed over the last 40 years as an asset class, they will inevitably experience "resonance," otherwise known as correlation.

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

For crypto assets, the biggest influences will no longer be simple supply and demand dynamics, nor tracking which addresses or wallets hold dump-heavy positions.

Recall the early Hong Kong stock market era depicted in *The Greed of Man*. Back then, analyzing macroeconomics was unnecessary because it wasn't the core variable. The core variables were float size, your holdings, and Fang Zhanbo's stakes. Everyone sat at computers typing away, hunting boards, competing solely on who held more chips.

The early Chinese stock market was identical. When manipulators gambled internally, macro fundamentals mattered zero percent because massive institutional money hadn't entered yet. That defined the early crypto circle and early-stage crypto assets.

Now it's different. Look at today's Hong Kong stock market. Would blue chips like Alibaba or Tencent still trade like that? Maybe on penny stocks, obviously, due to tiny scale. But for mega-cap assets, absolutely not.

At this stage, you realize macroeconomics and liquidity gain prominence. These factors impact large institutional portfolios (Portfolios), which in turn dictate performance for individual assets within them.

Modern crypto assets have already developed these traits. Many are starting to notice that AI stocks, Nvidia, and other artificial intelligence-related assets are resonating with crypto. Liquidity-driven valuation compression and conventional analytical models are beginning to shape crypto.

That's the answer.

Joe Zhou: So what is the current macro environment's impact on the crypto market? Macro-wise, what condition is the market in?

Fu Peng: Tightening liquidity began last November.

Around last November, the Fed's balance sheet contracted to a certain threshold. Note the phrasing: "contracted to a certain threshold." This triggers compression on the quantity (Q) side of liquidity.

The average citizen thinks US rate cuts are inherently positive for assets, but everyone overlooks that liquidity isn't just about the price of rates; it's also about money supply volume.

When QT magnitude contracts sufficiently, it neutralizes the liquidity surplus generated by rate cuts (P), causing overall systemic liquidity to actually tighten. At that juncture, all valuation-dependent assets face immediate pressure.

This logic has already been validated in traditional assets. Over the past six or seven years, it has occurred twice, both times impacting crypto. Hence, you can trace how the market shifted over recent years.

Joe Zhou: So when do you think this cycle ends? Meaning the relatively bearish phase.

Fu Peng: I told you earlier this year, end of this year.

Consider this: if liquidity gradually becomes the dominant market driver, your timing strategy must align precisely with that inflection point. Your entry/exit timing has to be exact.

In Fu Peng's view, understanding today's crypto market requires moving beyond purely tracking on-chain metrics, exchange flows, and whale positions.

As Bitcoin gradually transitions into an institutional-grade portfolio asset, it unavoidably becomes subject to traditional financial systems.

Rate cuts do not automatically guarantee liquidity expansion, nor does lowering interest rates mean all asset classes appreciate. The dynamic between money supply and funding costs is increasingly becoming a critical variable in crypto valuation.

The crypto sphere is evolving to mirror traditional financial markets. While the era driven purely by chip-based gambling hasn't vanished completely, macroeconomic conditions and liquidity have become unavoidable variables for an expanding roster of large-cap assets.

In the AI Era, Young People Can Become One-Man Hedge Funds

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

Fu Peng: It's fundamentally about the proliferation of AI Trading Agents. It will reshape the entire investor structure.

Simply put, retail traders will be eliminated faster. Crucially, today's Gen-Z youths, if they put in the work, could rapidly evolve into "one-man hedge funds." AI drives efficiency and slashes costs so dramatically that transitioning from retail to pro-tier is suddenly viable. Youth have real hope here.

Conversely, another group completely resistant to AI will also face rapid market elimination. Thus, extreme bifurcation is guaranteed.

AI unquestionably yields one outcome: a cohort of youngsters forming solo hedge funds, while established institutional tiers simultaneously grow more formidable.

When these institutions compete on trading execution, it won't hinge on "judgment" anymore, but rather dataset volume, data uniqueness, and computing power. If you're willing to inject billions into backend servers, data maintenance, and GPU compute, you outperform rival funds.

Do you think Renaissance Technologies built its fortune on human "judgment"? That was the computer epoch.

During the dawn of programmatic trading, when you weren't equipped to use it, I stepped in effortlessly: automated systems executing vs. manual order entry. I extracted profits from you flawlessly. That defined an era.

Joe Zhou: Will you feel it's becoming increasingly monopolized by giants?

Fu Peng: Undoubtedly. The endgame sees retail direct participation plummet dramatically. Essentially, individuals must transition to ultra-low-frequency asset allocation. Attempting high-frequency trading guarantees failure. These are historical inevitabilities.

Joe Zhou: Post-AI, will your allocation strategy or original business model shift?

Fu Peng: Minimal shift. We just gained an extra asset class; operations remain structurally unchanged.

Joe Zhou: Research methodologies though?

Fu Peng: Those will transform. Middle-tier analysts become redundant, even terminal order execution loses purpose. Your AI Trading Agent handles it autonomously.

Joe Zhou: Impact on you personally?

Fu Peng: Already happening. Forget me; many legacy London funds are shedding headcount right now because intermediation lost utility. We conduct daily sector macro analysis; formerly reliant on personnel capture, now powered by 17 AI employees.

Joe Zhou: If advising young investors on allocation today, what would you say?

Fu Peng: Damn it, what do young folks need portfolio allocation for? Isn't that kid coming up asking: "I've got 200k, how do I allocate?" I'd tell him, why don't you just go all-in?

Allocation demands baseline capital thresholds first, governed by risk tolerance, return expectations, et cetera.

Joe Zhou: Sketch a user persona for me: urban white-collar workers in tier-one cities with modest savings. Roughly how much should we allocate to crypto?

Fu Peng: Clear debts first, deleverage aggressively, secure employment cash flow, avoid displacement by AI. Only afterwards figure out investment targets. Absolutely do not swipe credit cards or borrow microloans to speculate on volatile assets. I can assure you, zero chance. Do not engage in such behavior.

Joe Zhou: But if everyone acts rationally like that, markets become incredibly dull. It morphs into a super-efficient marketplace.

Fu Peng: Markets themselves enforce cyclical eliminations. Remember, survival is itself a brutal filtration process.

Where Lies Crypto's True Value? Stablecoins, RWA, and Polymarket Through Fu Peng's Lens

Joe Zhou: I suspect novel innovations will emerge to liven up the market.

Fu Peng: Doesn't Polymarket seem intriguing to you right now? Identical mechanism (laughs).

Joe Zhou: Do you play it yourself?

Fu Peng: Hell yes, obviously. Didn't we bet on football matches back when we were in the UK? Same principle. But "our betting" versus "your betting" diverge completely.

With slower internet speeds back then, we carried walkie-talkies, bought bundled tickets ringside, and exploited latency arbitrage. Exchange feeds lagged roughly ninety seconds post-goal updating odds. That constituted genuine arbitrage.

Joe Zhou: Perspective on the future stablecoin landscape?

Fu Peng: Ultimately, stablecoin prevalence mirrors sovereign diversified forex reserves and currency utilization within global financial architecture. Ratios converge.

Stablecoins represent purely technological infrastructure. View our financial midstream—trade execution, settlement layers, payment rails—as progressively migrating from legacy fiat corridors to multi-currency pegged stablecoin networks.

Joe Zhou: Stablecoins vs CBDCs, which do you favor?

Fu Peng: Fundamentally anchored to stablecoins.

Joe Zhou: Thoughts on Real World Assets (RWA)?

Fu Peng: Merely a tool, honestly irrelevant categorically. You attach anything desired. Blockchain operates similarly—a foundational mechanism applied conceptually to finance. Historically, heavy documentary trade compliance required fraud prevention mechanisms; blockchain solves that elegantly.

Technological tools crystallize into "assets," but RWA functions as a vehicle, not intrinsic value creation itself.

Joe Zhou: Hong Kong's RWA innovation pipeline?

Fu Peng: Currently, stablecoins function as the most potent RWA application.

Legacy institutions desperate to penetrate seek tokenizing niche, longtail securities via RWA wrappers. Core question remains: comparative advantage over purchasing identical instruments natively?

Joe Zhou: Tokenizing highly liquid instruments like gold via RWA?

Fu Peng: Pointless. Gold operates as maximally commercialized, fiercely contested capital with inherent frictionless liquidity. Mandating secondary RWA layering adds zero utility.

Technology demands authentic deployment vectors. Assuming mature asset universes naturally accept RWA packaging proves erroneous. Breakthroughs typically originate beneath incumbent financial infrastructures.

Why Join New Fire Now? Digital Assets Transitioning Into the FICC+C Epoch

Joe Zhou: Motivation behind joining New Fire Group?

Fu Peng: Straightforward. All regulatory frameworks and technological breakthroughs materializing in 2025 signal an equivalent inflection point to FICC's explosive ascent during the 1980s. Post-WWII, the inaugural convergence of finance and tech reshaped markets in the 80s. This cycle represents phase two.

The FICC paradigm birthed modernity. Ignition complete. Symbiotic integration bridging legacy and emerging paradigms requires merely breaching that final paper windowpane; someone must strike the match.

Joe Zhou: Strategic advantages New Fire possesses amid generational transition?

Fu Peng: Superior directional selection.

Phase one exhibited retail dominance characteristics. Jokingly termed "barbaric growth" earlier, representing extensive developmental phases. Exhausted definitively. Decade-long regulatory harmonization terminated that trajectory permanently.

Exchange-centric architectures yield inferior scalability compared to active portfolio management initiatives currently pursued.

Consolidation remains inevitable: initial fragmentation inevitably precedes mega-mergers. Observable signals validate impending consolidation across NYSE/NASDAQ ecosystems. Institutional bridge integrations actively underway.

Joe Zhou: Forward-looking industry assessment?

Fu Peng: Traditional venues accelerate development cycles and deploy capital rapidly. Historical precedents confirm exhaustive homogenization culminating in hostile mergers/acquisitions leaving only surviving behemoths concurrently purging inferior listings.

Structural parallelism absolute. Dismissing unique crypto attributes ignores century-old cyclical replication patterns.

Joe Zhou: Executing discretionary trades holding Hong Kong SFC License Type 9?

Fu Peng: Aging gracefully declines frontline combat necessity. Mentorship protocols supersede operational vigilance. Why maintain battlefield visibility post-prime cognitive degradation risk? Parallels Dalio succession mandates transferring accumulated alpha generation frameworks vertically.

Joe Zhou: Timing alignment with structural paradigm shifts?

Fu Peng: Financial morphology evolves strictly according to computational capability parameters.

China, Hong Kong, and Crypto's Future: An Extended Epochal Transition

Joe Zhou: Outlook on contemporary China's economic trajectory?

Fu Peng: Globally convergent projections condensed into singular terminology: transitional metamorphosis.

Legacy relational structures and incumbent sectors confront systemic friction whereas disruptive modalities command premium valuation multiples. Domestic dynamics mirror international spectra utilizing AI/data/compute/robotics cohorts experience optimal operational environments conversely property developers embedded within traditional manufacturing chains encounter intense capitulation pressures.

Binary correctness frameworks dissolve mutually exclusive coexistence defines reality.

Current configuration manifests simultaneous presence paradigms reformulation advocates declare completion milestones achievement whereas incumbent stakeholders request rescue interventions. Contradiction represents mathematical inevitability.

Parallel United States trajectory observed peaking circa 2015/2016 macrocycles. Post-2008 deleveraging processes annihilated leveraged incumbents synchronously incubating nascent verticals Cathie Wood-referenced disruption categories maintained early-stage upside potential validating dual-track progression mechanics.

Joe Zhou: Constraints impeding indigenous crypto-financial innovation ecosystems?

Fu Peng: Financial engineering constitutes organic evolutionary pathways mirroring technological advancement vectors.

Geopolitical divergence materializes implementation methodologies Western jurisdictions initiate unauthorized deployment subsequent regulatory catch-up procedures encourage audacious progression Asian territories mandate prerequisite compliance verification liability assumption confirmation delayed adoption synchronization protocols.

Joe Zhou: Optimization strategies navigating cultural asymmetries?

Fu Peng: Primary catalyst identification.

Joe Zhou: Hong Kong.

Fu Peng: Geographical mediation zones optimize throughput capacity. Non-participation equates systemic obsolescence acceleration mandatory engagement required mitigating marginalization risks without replicating maximalist libertarian expansion trajectories characteristic continental north American equivalents.

Optimal equilibrium positioning situated transcending eastern conservationism avoiding western liberal excess maximizing operational velocity parameters maintaining intermediate calibration standards.

Joe Zhou: Mainland regulatory relaxation probabilities?

Fu Peng: Zero probability matrix previously articulated comprehensive geopolitical philosophical dichotomies generating fundamentally orthogonal methodological frameworks. Western experimentation-first approaches contrast sharply against Eastern validation-delayed execution sequences.

Joe Zhou: RMB-pegged stablecoin approval forecasts?

Fu Peng: Positive eventual authorization expected requiring extended temporal horizons. Iterative observation frameworks monitor overseas pioneer hazard clearance preceding domestic replication routing.