PANews June 25 news, Hu Jie, former senior economist at the Federal Reserve and professor at the Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University, appeared as a guest on Huobi’s Master Lecture Hall. During the live broadcast, Hu Jie stated that after the 2008 financial crisis, the Federal Reserve’s monetary policy underwent a significant paradigm shift, relying more on balance sheet tools such as quantitative easing (QE) to inject liquidity into the market by massively expanding the base money supply. This change not only fueled the decade-plus bull market in U.S. stocks, but also profoundly influenced the pricing logic of global risk assets, including Bitcoin. As Wall Street capital continues to flow into the crypto market, Bitcoin’s correlation with traditional financial markets is steadily increasing, and its price movements are increasingly affected by global liquidity conditions.
Regarding the market’s focus on the policy direction of the new Federal Reserve Chair, Hu Jie believes that after the new chair takes office, monetary policy is likely to undergo another paradigm shift, with the most notable being the balance sheet reduction (quantitative tightening, QT) process. Balance sheet reduction means the Fed will actively withdraw base money and reduce market liquidity supply. From a single-factor perspective, this is not favorable for risk assets including U.S. stocks and Bitcoin, so investors should pay close attention to changes in the Fed’s balance sheet.
Talking about the future of the crypto market, Hu Jie believes that the integration of Bitcoin with the traditional financial system is still accelerating. From the approval of Bitcoin ETFs to the rise of RWA (real-world assets) and tokenized U.S. equities, more and more Wall Street capital is entering the Web3 market through compliant channels. In the short term, some funds may be diverted by new assets such as tokenized U.S. stocks, but in the long run, this is effectively opening up funding channels between traditional finance and the crypto market, and is expected to bring broader incremental capital sources to Bitcoin and the entire digital asset industry.
