Unprecedented! A veteran who has been in Wall Street for 25 years has just revealed a piece of buried history, unveiling the true fate of $BTC...

Many people ask me why I have become so closely associated with crypto assets. This origin dates back to around 2022, which makes it four years now. Even while working in traditional finance, I have never stopped observing this market.

Today, standing here, I just want to tell a historical story. My title is economist, but I am not purely an academic. Over the past 25 years, my core experience has been in hedge funds.

Why did traditional capital start paying attention to crypto assets? I have repeatedly mentioned over the past year, that future major asset allocation will inevitably be “FICC + C,” that is, the integration of traditional interest rates, commodities, exchange rates, credit assets, and crypto assets.

To understand this, we must turn back to the origin of FICC—the late 1970s to early 1980s. Over the past decade, the major changes in the global landscape are most similar to that period after World War II.

Every round of technological progress, such as artificial intelligence today, will reshape all industries, and finance is no exception. Finance is never static.

Many people’s impression of finance still lingers in scenes from “The Big Shot,” where traders wear vests shouting orders, or the card-drawing machines in stock exchanges. That is indeed finance, but that was finance before the 1960s and 70s.

The greatest transformation in finance has always accompanied technological advances. The previous cycle, driven by semiconductors, computers, and personal computers, reconstructed the financial landscape in the late 1970s.

Today’s familiar cross-asset trading began to take shape in the early 1980s. The Black-Scholes model for option pricing was developed in the 1970s, but without the widespread use of computers, pricing derivatives would take tens of minutes, making real-time trading impossible.

Bloomberg terminals only started being used by professional institutions in 1985. During the Asian financial crisis in 1997, I began to access Reuters systems. It was the era of computers and information technology that gave rise to later FICC.

The ability to integrate asset classes, cross-asset trading, hedge funds, and algorithmic trading emerged accordingly. Without this leap in productivity, finance might still be stuck in the vest era.

JPMorgan became a leader in financial derivatives. Its hire of Cambridge graduate Blythe Masters laid the foundation for the entire derivatives market and turned FICC into Wall Street’s most profitable segment.

All of this is inseparable from the turbulence of the 1970s. The origin of technological progress often coincides with global upheaval. That era experienced the Cold War, Middle East conflicts, oil crises, gold surges, and systemic decoupling.

Human civilization always walks hand in hand with opportunities and risks. On one side, chaos reigns; on the other, computers and information technology rise. I once joked that there was a strange investment portfolio at that time: betting simultaneously on “humanity’s future” and “humanity’s end.”

Looking at 2019 to today, do you also hold assets with these two natures at the same time?

Today, as everyone recognizes that AI, data, and computing power will become the core productivity of the next generation, the game is actually already in the second half. The entire first half is what we know as the traditional crypto space.

I tell these stories because nothing is immutable. Everything is constantly reconstructed and reborn in development. The moment I entered this circle may be seen in the future as a significant milestone.

Just like Blythe Masters entering JPMorgan. This milestone may mark the end of the early stage of the past 10 to 15 years and the beginning of a new development phase. Investors, market systems, and rules of the game will all undergo major changes.

If you have worked long enough in traditional finance, you will fully understand what is about to happen. It’s similar to how early on, provincial financial offices in China established exchanges, then strengthened compliance, experienced survival of the fittest, and derivatives gradually became part of financial institutions’ portfolios. Crypto assets are undergoing the same process.

Today, everyone is accustomed to commodities, exchange rates, and treasury futures, but before the 1980s, derivatives of these assets were not widespread. Does this feel like when we first encountered stock index futures and options in 2009?

The technological progress of that era drove the transformation of traditional finance into FICC. Today, data, computing power, AI, combined with blockchain technology, are reconstructing finance with the same logic.

In the past, we paid attention but did not participate. Early on, faith and fundamentalism were needed, but true capital would not over-participate in faith trading. Only when it gradually matures and certainty appears will it be incorporated into asset management frameworks.

Just as mung beans and green beans cannot be part of institutional portfolios, copper futures, options, and ETFs can. This is exactly the transformation happening across the crypto ecosystem.

2022 marked the starting point of my substantial engagement with this circle. In 2021, when Bitcoin was around $70k, I was interviewed. I openly said that, within the traditional framework, we could not understand this kind of asset.

We do not fully agree with the faith narrative. We have our own interpretive framework, such as its function as a store of value. At that time, I thought the timing for involvement was not yet ripe.

But I pointed out an observation: the U.S. Commodity Futures Trading Commission had already explicitly classified it as a commodity, a tradable financial asset. This gave me a foothold for understanding.

I made a blind guess: if liquidity sharply tightens in 2022, traditional valuation assets will undergo valuation destruction. If my understanding of crypto assets is correct, they will fall along with this valuation wipeout. I guessed it would drop by half.

Later, when Bitcoin fell to $20k, many in the circle reached out to me, beginning to realize that the times might have changed.

The exchanges and communications over the past few years have shown me that the true crypto bigwigs, like early pioneers in traditional finance, all have a rough style. Whether it’s Chinese commodity futures traders or others, early on, they all needed to “take a gamble.”

But those who can move forward are those who quickly absorb new paradigms at turning points and complete their transformation. Those clinging to old experiences will eventually be eliminated by the times.

My personal view is that 2025 and 2026 could be critical years for crypto assets. We need to integrate our understandings: you tell me what it is, I absorb and integrate from a traditional finance perspective, then interpret it through our logical path.

After several years of integration, a new system is taking shape. From the end of last year to this year, the valuation squeeze caused by a new round of liquidity tightening has happened again, and the crypto space has replayed the same story. This proves our integration path is correct.

In the end, there will no longer be divisions, just like the integration of stock traders in the 70s with later major asset traders. So, the future must be “FICC + C.”

Another key point is compliance. 2025 will be an important inaugural year. Whether it’s the stablecoin legislation or laws providing certainty for digital assets, clear market answers have already been given.

In the future, we will see Wall Street’s traditional financial institutions rapidly entering this market. It will be incorporated into diversified asset reserves, just like diversified foreign exchange reserves. From a single reserve asset to diversified trading assets.

Back then, we could include commodities, exchange rates, and interest rates; today, we can include crypto assets. But remember, when integration occurs, market logic will declare a new era, and old habits will become invalid.

After the 1980s, the proportion of retail investors in the US stock market gradually declined, while institutional participation increased. This is an inevitable stage for any market to mature from early development. Now, that moment has arrived.

Stablecoins have segmented the payment functions of blockchain technology. So, what exactly is Bitcoin? A reporter asked if it is digital gold. This statement is controversial because it depends on the listener’s cognitive framework.

For me, I can immediately understand what it refers to. But for ordinary investors, the words “gold” will directly trigger associations with physical gold.

The complete definition of gold is: a tradable commodity asset that has a store of value function. Some assets have value but may not have large-scale financialization or tradability.

For example, limited-edition sneakers, collectibles, luxury watches—they have broad emotional or collectible value but may not be widely financialized. Cultural artifacts and collectibles are the same.

Therefore, a complete definition of any asset is crucial. Now, the standard definition of crypto assets is very clear.

The development path of Western society is clear: where there are no prohibitions, innovation and exploration are encouraged. The development of financial derivatives follows this logic: first, there is customer demand; then, start working on it; compliance is layered in afterward; and finally, it matures.

Crypto assets follow the same logic. The question now is, by 2025, will financial regulation follow with a clear answer? My answer is: yes.

Therefore, in the future, you will see stablecoins applied in payments, and what will Bitcoin become? An asset with a store of value and the ability to be financialized and traded—that is its full significance.

I know this definition may upset the fundamentalists of the previous era. But this is the era, and it is an inevitable evolution within a logical framework.

At this point, Wall Street can fully step in. A new chapter is about to begin.

This may also answer many people’s questions: why would a veteran with 25 years in FICC enter such an emerging industry? I want to say, because you have now reached a level of maturity where you can be included in investment portfolios.

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