Exclusive Interview with the Chief Editor of Financial Times Chinese Website: What's your take on Crypto?

Interview: Eric, Techub News

Organizer: J 1 N, Techub News

The financial market bubble is not accidental, but the confluence of technological innovation, capital promotion, human greed, and lagging regulation. Cryptocurrency, AI, the Internet, the development paths of these industries are surprisingly similar: new technologies bring imagination, capital promotes the wave, information asymmetry creates arbitrage opportunities, and lagging regulation allows the market frenzy to continue.

Technology itself is not a bubble, but the market’s over-valuation of technology often creates irrational prosperity. Bubbles may last for five years, ten years, or even longer, and geopolitical factors and capital games make the market even more unpredictable. However, history tells us that ultimately everything will return to rationality.

In such a cycle, individual sobriety and choices are particularly important. The idea of “being awake while others are drunk” does not always lead to the best results. The market’s irrationality often exceeds the patience of the majority. Understanding market laws, recognizing bubble cycles, is key to maintaining rationality and avoiding being carried away in an era of frenzy.

In December last year, the Financial Times of the United Kingdom published a satirical article in its column Alphaville, which focuses on pinpointing the malpractices. Against the backdrop of Bitcoin surpassing $100,000, it ‘apologized’ for its long-standing comments on fraud and manipulation in the Crypto market. This also aroused the curiosity of the author. How do traditional financial markets and top financial media view Crypto? Over the years, have their impressions of Crypto changed?

To this end, we interviewed Mr. Wang Feng, the editor-in-chief of the Financial Times Chinese website, to see what “shape” Crypto is in his eyes:

Techub News: What kind of channel is Financial Times’ Alphaville? I specifically took a look before and found that the content is very direct and critical. Why was this channel established? Why is the writing style so bold?

Wang Feng: This is one of the many columns of FT. In my impression, the author is not a full-time journalist or editor of FT. There are two types of columns in FT: one is written by full-time employees of FT, and the other is contributed by external professionals. Alphaville belongs to the latter, and its authors are usually professionals in the financial field with regular contributions to FT. This is a team-operated column, not managed by a single author.

Alphaville’s writing style is different from FT’s other columns. The other columns of FT are more formal, following the format of news analysis or commentary, maintaining a certain objectivity whether in the first person or the third person. Alphaville is more like a blog, quoting a large number of financial industry analysis reports and company annual reports, and directly expressing opinions. The language style is more casual and free, approaching colloquialism, sometimes expressing viewpoints directly, abruptly, even with a certain sense of humor or sarcasm.

When we translate this type of article, we may find that the style is quite unique, and sometimes we may not choose its content. Nevertheless, its topics closely follow market trends, written by industry professionals, providing industry insider analysis quickly, making it popular among investors. The focus of the column is on the market and investment, where ‘Alpha’ represents Absolute Return. As can be seen from the column name, its core purpose is to provide guidance for investments.

Techub News: Just now you mentioned that Alphaville’s views do not represent the official position of the Financial Times. Take the article on Bitcoin breaking ten thousand US dollars as an example. They published a ‘apology’ article with a sarcastic tone. Since the article can be published on the FT website, does it mean it has been reviewed? Or does it mean that Alphaville’s content can be freely published?

Wang Feng: The final decision to publish an article lies with the FT editors. Although the author may not be an FT employee, there is a certain level of communication between the writer and the editor. The topic may be discussed with the editor first, or the writer may submit it directly after completion, and the final decision on publication is made by the editor.

As for whether it represents the overall position of FT, this is a complex issue. In Western media, columns, comments, and analysis articles are usually not considered to represent the views of the entire newspaper. Newspapers, websites, blogs, and other multimedia content generally provide diverse information for readers, rather than conveying a single position.

Only in a very few cases, such as American newspapers during the presidential election, will openly support a candidate. At this time, the newspaper will speak out in an official capacity. But in most cases, especially British newspapers, the editorial side will not consider whether a column represents the entire newspaper’s position.

FT does not express its position with a single voice, but provides a wealth of information, comments, editorial analysis, and data to serve readers as a whole. In the media, the editorial (Editorial) represents the official position of the newspaper, and different newspapers may have different names for it, such as ‘Leader’ or other specialized names.

The writing of editorials is usually the responsibility of the Editorial Board, which must be approved by the editor-in-chief. Especially when it comes to important issues, editorials often go through team discussions and reviews. Therefore, editorials can be considered as the official representation of the media’s position.

However, FT and many other media outlets have various columns and comments, which may be written by internal journalists or contributed by external contributors. It cannot be expected that the analysis and views of each column represent the overall position of the newspaper. In most cases, the media also does not want to maintain a single voice on all issues. The main responsibility of the media is to provide objective reporting, facts, and data, with opinion expression being only a secondary function.

Especially in the Western media environment, unless facing major political issues such as the U.S. presidential election, newspapers may openly support a candidate, but generally do not express a unified position. Most of the time, it is not very meaningful to discuss whether an article represents the newspaper’s stance, because the media’s task is to provide information, not to lead public opinion.

In addition, most journalists and editors are not industry experts. Their responsibility is to find real insider experts and organize and share information with readers.

Techub News: The ironic article published by Alphaville concluded by mentioning that their criticism is not only aimed at Bitcoin, but also applicable to traditional finance. This indicates that they are not simply against cryptocurrencies, but take a critical stance towards the financial industry as a whole. Why would a financial media make such a statement?

Wang Feng: Alphaville has always been consistent in style. If they see unfairness, information asymmetry, or other unfair practices in the market, they will criticize directly. Whether it is cryptocurrency or traditional finance, if they find monopolies, lack of transparency, or behaviors that exploit information asymmetry for improper gains, they will expose them.

Many senior FT journalists and editors are skeptical and critical of market phenomena. After long observation of the traditional financial markets, they believe that there are many situations where profits are gained through opaque information, which is the core profit model of the financial industry. Therefore, they remain vigilant about industry chaos and tend to reveal potential irrational phenomena.

From the perspective of the value system, they will evaluate whether the profits of financial institutions are commensurate with their efforts and judge their reasonableness. Therefore, the traditional financial industry has made them ‘uncomfortable’ with many things, and cryptocurrencies are seen as having more issues, such as lack of transparency, unfairness, and even suspected fraud. Therefore, Alphaville’s criticism of the cryptocurrency market appears even more intense.

However, readers familiar with this column can usually understand its style. They criticize any unfair market behavior, not targeting a specific industry or product, but hoping to improve information transparency in the market to some extent.

Techub News: From your perspective and that of FT Chinese, how do you view cryptocurrencies?

Wang Feng: Over the past few years, we have produced a lot of related content and have also paid attention to the English version of FT’s coverage in the cryptocurrency field. FT currently has a dedicated virtual assets and cryptocurrency channel on its website, updating multiple articles daily, mainly translated from the English version, with some original reports and third-party columns.

The attitude of the English version of FT is: Cryptocurrency is a market that must be paid attention to because it objectively exists and has a large number of transactions. As long as there is a market and investors, there is a reason to report. Although columns such as Alphaville have deep doubts and critical attitudes towards the opacity, information asymmetry, and even suspected fraud in the cryptocurrency market, as a media outlet, FT still needs to report on this market to meet the needs of readers and provide impartial information.

FT Chinese website’s coverage direction is basically consistent with the FT English version. The Chinese-speaking community occupies an important position in the cryptocurrency and Web 3 fields, once dominating the industry. Therefore, we have more reason to follow related reports. In recent years, we have adopted a ‘cautious but necessary follow-up’ attitude towards this field, hoping to provide diverse viewpoints, but will not overly express personal editorial opinions.

Our way of reporting is mainly objective news, not driven by personal opinions. For example, when we interview industry analysts, entrepreneurs, and industry leaders, we will try to present different perspectives instead of guiding readers to form a specific viewpoint. Because this market is extremely risky, full of interests and temptations, we are very cautious, avoiding expressing subjective opinions casually to prevent being proven inaccurate or one-sided in the future.

Although most of our content is still translated into English, due to the active Web 3 entrepreneurial ecosystem in the Chinese-speaking community, we also have independent sources of information, sometimes even faster than English FT in grasping industry trends. For example, our interviews and reports can present the crypto trends in Asian markets such as Hong Kong and Singapore, while also paying attention to emerging markets in Southeast Asia and the Middle East.

My personal views do not represent any individual or institution. From the interactions and reports over the years, I believe that cryptocurrencies do have potential from a technological perspective, especially when combined with Web 3 and AI, it may become the next trigger point for the Internet revolution. This technology itself has value, especially in areas such as decentralized blockchain, smart contracts, data security, etc.

However, at the same time, the cryptocurrency market lacks transparency and regulation, leading to a significant amount of speculation, manipulation, and even fraudulent activities. This is also why the media, regulatory agencies, and traditional financial industry are cautious towards it. The traditional financial industry has long relied on profiting from asymmetric information, while the issues in the crypto market are even more serious with lower transparency, making it prone to forming bubbles. Therefore, many experienced journalists and market observers hold a skeptical attitude towards cryptocurrencies and are willing to expose the chaos within.

In the past few years, the Hong Kong government has vigorously supported the Web 3 and cryptocurrency industries, while emphasizing regulation and orderly development. Hong Kong and Singapore have become the two core markets for virtual assets in Asia, with their respective policies and market trends also competing. Our coverage will focus on the development of these regions, expanding to emerging markets such as Southeast Asia and the Middle East.

Techub News: How do you view the current state of the cryptocurrency market?

Wang Feng: From a technical perspective, blockchain and related technologies have great potential, especially when these technologies are combined, they can drive new technological developments. Indeed, many professionals are dedicated to research and development in this area, which is worth paying attention to.

On the other hand, there are too many temptations in the market, and the ways of making profits are too rough and wild, even surpassing the traditional financial industry. From leaders of the free world to bold and innovative entrepreneurs, many people are able to create huge wealth in a very short period of time. This phenomenon has led to an extremely restless market, especially for ordinary investors. Most people do not pay attention to underlying technological innovations, but rather think about how to “make quick money” or cut leeks.

The Trump coin issuance incident further strengthens the market atmosphere of ‘issuing coins is reasonable, cutting leeks is not guilty’. His actions provide unprecedented endorsement for this market logic, further undermining market regulation. As a traditional media journalist, I remain vigilant about this phenomenon.

But from a news perspective, this industry has unexpected events every day, always full of hot topics, keeping reporters ‘busy’. For the entire industry, this situation brings both risks and means that a certain proportion of funds will be deposited into the research and development of underlying technology, team building, and talent development. This is a complex situation, with both pros and cons.

The long-term sustainable development of the industry still faces uncertainties, and any experience from traditional industries cannot be used to accurately predict the future of the cryptocurrency market. What can be confirmed is that this industry has long-term potential, and the underlying technology still has huge room for development. However, currently, the majority of mainstream market participants are still focused on short-term speculation rather than truly driving industry development.

Techub News: What do you think of Trump issuing Memecoin?

Wang Feng: Trump’s issuance of coins is more of a challenge to the traditional political order than a disruption to the currency circle.

In the currency circle, similar things have long been commonplace, and many people will issue coins after gaining influence, using fan economy and market speculation to earn huge wealth. Essentially, the currency circle is a “jungle world” that follows the law of the jungle, as long as someone is willing to pay the bill, they can profit legally. From this perspective, Trump’s behavior is not out of line.

But as a former president with immense political power and a potential future leader, issuing coins on the eve of the election is a major blow to the traditional political system. This poses a challenge to the government management system as it involves conflicts of interest and issues of national governance transparency.

In theory, if he sets transparent and standardized standards during the token issuance process, such as providing detailed disclosure information, it may have a positive guiding effect on the industry. However, in reality, his way of issuing coins is very casual, just announcing it briefly on Twitter and social media, and completing the issuance by building a rough website. This kind of randomness will only reinforce the disorderly state of the market, rather than guide the industry towards standardization.

Techub News: Is the ‘National Bitcoin Reserve’ feasible?

Wang Feng: Trump can propose any policy, but whether other countries are willing to follow is another question. Bitcoin, as a national reserve asset, theoretically can exist in asset diversification allocation, but it is difficult to become a core reserve asset for three reasons I think:

The market is easily manipulated: the liquidity and volatility of the Bitcoin market are too high, far exceeding traditional assets, which do not meet the stability requirements of national reserve assets.

Lack of regulation: The decentralized nature of Bitcoin makes it difficult for governments to effectively control or regulate the market.

Traditional financial system does not recognize: Although some institutions are trying to invest in Bitcoin, as a national reserve, it still needs higher credit endorsement.

The United States under the leadership of Trump can do anything crazy, but if other countries want to follow suit, they must carefully consider the potential risks. The choice of national reserve assets is related to financial stability, and major powers will not easily accept Bitcoin as a major reserve asset. Trump’s proposal seems more like a campaign propaganda rather than a truly viable policy. (Note: This interview was conducted before the lunar new year, and at that time, Trump had not yet signed the executive order for Bitcoin as a national reserve.)

Techub News: As the editor-in-chief of the Chinese website of the Financial Times, how do you understand the two words “finance”? The speculative nature of the crypto market seems to be far from our understanding of “finance”.

Wang Feng: This is a very big problem, and I’m not sure where to start. In terms of the market, the essence of the market is asymmetric information, information asymmetry always exists, and those who seize the opportunity can always profit from it. The early stages of traditional finance also experienced chaotic, disorderly, and barbaric development, which was full of speculation, manipulation, and survival of the fittest logic.

Many things happened in the currency circle today, such as cutting leeks, speculation, market manipulation, which are actually not unfamiliar in the traditional financial industry. In the final analysis, this is all about human nature. The way the market operates has not fundamentally changed, just changed the technical carrier, from stocks, bonds, derivatives to cryptocurrencies and DeFi, but the core logic is still that the pioneers use information asymmetry to profit.

The essence of a Ponzi scheme is the same. As long as the bubble can continue to expand, everyone can profit in the short term, and this game can continue. The history of the financial market constantly breaks people’s understanding of the duration and scale of Ponzi schemes. Past seemingly unbelievable phenomena often reappear in new markets in larger scale and longer cycles.

One of the fundamental laws of finance is that all wealth ultimately requires someone to pay the price. As long as someone makes money, someone will lose money. This holds true in the long run, but in the short term, especially in the stage of rapid expansion in emerging markets where regulation has not caught up, market frenzy and bubbles can often last longer.

Currently, we are in an era where technological development far outpaces regulation and public awareness. The market’s self-adjustment and correction require more time than ever before, so we constantly see new bubbles breaking historical records, such as the current cryptocurrency bubble and AI bubble.

The duration of bubbles is unpredictable. The Internet bubble burst in the early 2000s, but the current AI or cryptocurrency bubble may last for five years, ten years, or even longer. In addition, geopolitical factors may also affect the sustainability of the bubble, for example, the Trump administration has deeply tied the fate of the United States to the AI industry, which may further fuel the expansion of the bubble.

Technology itself is not a bubble, but when factors such as capital, speculation, human greed, etc. are forcibly superimposed on the development of technology, it may lead to a long-term market maintaining irrational prosperity. In this environment, people may even begin to doubt whether the bubble will exist forever. However, from the perspective of human history, all bubbles will eventually burst, and the market will eventually return to rationality, back to a state based on real demand and sustainable growth.

The current wealth accumulation and industrial prosperity in the market have surpassed people’s traditional perception of market bubbles. However, this is mainly because we have observed the market from a too short time dimension.

In history, some financial bubbles may take decades or even centuries to burst and return to rationality. From this perspective, it may still be too early to discuss when the market will collapse. From a time scale of hundreds of years, the basic laws of the market will not change, but in the short term, market frenzy may still continue for many years.

Therefore, any market judgments we make today may appear too short-sighted when placed in a longer time frame. The operation of the financial markets is not controlled by individual will, but follows its own development rules. The most important thing is for individuals to keep a clear head and take responsibility for their decisions.

During the market frenzy, the situation of ‘everyone is drunk but me’ is very common. However, the one who is sober may not necessarily get the best outcome. In the short-term market, the craziest, most irresponsible, and even the most selfish people may actually profit the most, while those who try to stay rational and make long-term correct decisions may not survive until the bubble bursts and reap the benefits.

Just like the 2008 financial crisis depicted in the movie ‘The Big Short,’ some people who saw the market risks early, although they made the correct market judgments and engaged in long-term hedging bets, many of them did not profit because they did not hold on until the end. Sometimes, those who make the correct judgment too early end up being eliminated in the process of market operation.

The key is that everyone needs to take responsibility for their own choices. Market trends are uncontrollable, and what individuals can do is to stay clear, understand their investment logic and risk tolerance, and not be carried away by market frenzy.