Wosh's debut expectations reversal: In the era of multi-assets, the macro questions that Web3 players cannot avoid

Author: Jessy

Wash's Debut, Fed's Direction Completely Reversed

On June 17, Kevin Wash presided over his first interest rate meeting as the new chairman of the Federal Reserve.

In the minutes from the March meeting, most officials were still betting on one or two rate cuts within the year. Many crypto investors were filled with anticipation for Wash, as he was appointed by Trump and was expected to likely push for monetary easing after taking office.

After the meeting concluded, the dot plot was released, and the results were surprising: among the 18 officials who submitted forecasts, 9 expected at least one rate hike within the year, with 6 expecting two or more hikes.

Just three months ago, the Fed was still discussing "how many cuts," but in Wash's debut, they were discussing "how many hikes."

Wash said, "Look at the data."

The three major U.S. stock indices collectively plummeted, with the Nasdaq falling over 1%; the reaction in the crypto market was even more intense. Bitcoin, which had been rebounding above $65,000, dropped directly to around $64,000 after the meeting results were announced, a decline of nearly 3%.

Looking through various financial media interpretations, some crypto investors sought an explanation for "look at the data," only to find themselves stepping into a deeper "fog of terminology." Various technical terms bombarded them: one moment it was about CPI hitting a new high month-on-month, and PPI production prices not yet fully transmitted; the next moment it was about non-farm payrolls in May exceeding expectations, with data from the previous two months needing to be "revised up." What frustrated crypto investors the most was the Fed's own updated economic projections (SEP), filled with PCE, core PCE, and a downward shift in the median of the dot plot…

Staring at the dense professional interpretations did not bring clarity but rather a strong sense of helplessness. In the eyes of financial media, these data points intertwined with clear causality. But for most people, these abbreviations and logical impacts felt like a completely new language; they recognized each word but had no idea what it meant when put together.

To truly understand this meeting, it seemed necessary to grasp how inflation, interest rates, and the Fed's decision-making mechanisms operate—a whole set of TradFi (traditional finance). Yet, at present, a crypto investor has to monitor the Fed's meetings, international situations, the dollar index, and the tightening or loosening of global liquidity just like traditional financial market investors. After all, in today's increasingly close integration of crypto and traditional finance, crypto is no longer an island but a part of the global asset landscape, rising and falling with the dollar, U.S. Treasuries, and risk appetite.

In the Multi-Asset Era, Crypto Investors Need to Learn TradFi More

In earlier years, the fluctuations in the crypto space were not closely tied to the tides of the global economy. In recent years, with the boom of ICOs and the popularity of meme coins, crypto investors were more accustomed to observing on-chain capital movements and the buying and selling actions of whales, following the latest industry technology trends to find investment targets.

Information such as the Fed's interest rate meetings, non-farm payroll data, and CPI that traditional financial investors needed to pay attention to were not as important for crypto investors.

However, starting in 2024, the relationship between cryptocurrency fluctuations and the macro economy is becoming increasingly close. In January of that year, Bitcoin spot ETFs were officially approved for listing in the U.S., and six months later, Ethereum spot ETFs followed suit. For the first time, Wall Street money could openly and massively buy Bitcoin and other virtual currencies. After traditional asset management giants like BlackRock and Fidelity entered the market, crypto assets were included in the same balance sheet as stocks and bonds, rising and falling according to the same macro logic. The binding of crypto and macro finance is deepening, and everyone has to start learning TradFi-related knowledge.

For most crypto traders, this is not an easy task. For example, before the meeting on June 17, many crypto players mistakenly categorized Wash as a dove due to their lack of understanding of the terms "hawkish" and "dovish"—after all, he was appointed by Trump, so he should advocate for easing. But in reality, hawkish and dovish are not political stances; they reflect central bank officials' judgments based on current data: high inflation tends to favor rate hikes to control prices (hawkish), while a weak economy tends to favor rate cuts to stimulate (dovish). With inflation at 4.2% when Wash took office, he could not ignore the data. Misunderstanding the true meaning of a term led to incorrect judgments.

Financial Education Should Be Simpler

If one wants to learn the true meanings of the concepts mentioned in the meeting after it concludes, a quick search will yield either lengthy analytical papers or professional textbooks filled with a bunch of English abbreviations. However, what ordinary investors are looking for in learning content is actually quite simple: an explanation in plain language of what these things are and why they are important.

The threshold for traditional financial education has always been high. The terminology is dense, and the expression is academic, as if it assumes that the reader already has a certain financial foundation to qualify for further reading. Yet for many who have transitioned from the on-chain world, what they lack is precisely the "foundation" shaped by traditional financial academic education.

But the best education often comes from the simplest questions, such as what is a stock? Why do companies go public? Why does gold rise when there is a war? What does a rate cut really mean? What exactly is an ETF? These questions may sound basic to the point of being "childish," but the process of learning new knowledge is fundamentally about understanding these "childish" questions before grasping more complex logic.

I noticed an educational series—"100 Questions About TradFi," initiated by Bitget in collaboration with industry partners, which aligns perfectly with the kind of "foundation" for financial learning that I desire.

Currently, TradFi is undoubtedly becoming increasingly intertwined with Crypto. Major mainstream exchanges have already launched RWAs of traditional financial assets like U.S. stocks and gold, and the barriers between crypto and traditional finance are rapidly dissolving. Cross-asset trading has become a clear trend. However, most platforms in the industry focus solely on expanding trading categories and enriching product tracks, with few taking the time to address the most core pain point for investors—the vast majority of native crypto players lack a complete and accessible understanding of traditional financial knowledge. Launching systematic financial education at this juncture may not quickly bring traffic and revenue, but it is a challenging yet correct endeavor.

According to official descriptions, "100 Questions About TradFi" breaks down traditional financial learning into 100 specific small questions, categorized into six modules: from the most basic "Re-understanding Money and Markets," to "What Exactly Are Stocks and ETFs," to "How Do Order Books, Leverage, and Market Makers Operate," followed by macroeconomics and trading psychology, and finally discussing what TradFi and Crypto look like after deep integration. Accompanied by video effects, the content covered in a thick financial textbook is broken down into lively short videos.

The crypto industry has long since left the barbaric era of only looking at on-chain data. The institutional funds brought by ETFs and the reality assets unlocked by RWAs have placed Crypto firmly within the global liquidity cycle. The future financial market will undoubtedly be bidirectional: traditional financial assets moving on-chain, and crypto assets included in the global asset allocation list.

Currently, the boundaries between TradFi and Crypto are becoming increasingly blurred. Being able to switch freely between them and understand each other's language will be a true advantage for the next generation of investors.