TechFlow News, June 25: Hu Jie, former senior economist at the Federal Reserve and professor at Shanghai Advanced Institute of Finance, Shanghai Jiao Tong University, appeared on Huobi’s “Industry Experts Lecture Hall.” During the livestream, Hu Jie stated that following the 2008 financial crisis, the Federal Reserve underwent a significant paradigm shift in its monetary policy, increasingly relying on balance-sheet tools—such as quantitative easing (QE)—to inject liquidity into markets via large-scale expansion of the monetary base. This shift not only fueled a more-than-decade-long bull market in U.S. equities but also profoundly reshaped the pricing logic of global risk assets—including Bitcoin. As Wall Street capital continues flowing into the crypto market, Bitcoin’s correlation with traditional financial markets has strengthened steadily, and its price movements are becoming increasingly sensitive to global liquidity conditions.
Regarding market concerns over the new Fed chair’s policy direction, Hu Jie opined that the incoming chair is likely to drive another paradigm shift in monetary policy—with the most critical development being the quantitative tightening (QT) process. QT entails the Fed actively withdrawing base money from circulation and reducing liquidity supply to markets. Viewed in isolation, this trend is unfavorable for risk assets—including both U.S. equities and Bitcoin—so investors must closely monitor changes in the Fed’s balance sheet.
On the future of the crypto market, Hu Jie noted that Bitcoin’s integration with the traditional financial system is accelerating. From the approval of Bitcoin ETFs to the emergence of real-world asset (RWA) tokenization and tokenized U.S. equities, increasing amounts of Wall Street capital are entering the Web3 ecosystem through compliant channels. In the short term, some capital may be diverted toward newer assets such as tokenized U.S. equities; however, in the long term, this process effectively establishes funding conduits between traditional finance and the crypto market—potentially unlocking broader sources of incremental capital for Bitcoin and the broader digital asset industry.
