Walsh's debut reverses expectations: In a multi-asset era, web3 players cannot bypass macroeconomic tests

Original author: Jessy

Warsh's debut signals a complete reversal in the Fed's stance

On June 17, Kevin Warsh presided over his first Federal Open Market Committee (FOMC) meeting as the newly appointed Fed Chair.

In the minutes from the March meeting, most officials were still betting on one or two rate cuts within the year. Many crypto investors had high hopes for Warsh, perceiving him as a Trump appointee who would likely push for monetary easing.

But when the meeting concluded and the dot plot was released, the results were unexpected: of the 18 officials who submitted forecasts, nine anticipated at least one rate hike this year, with six expecting two or more hikes.

Just three months ago, the Fed was still debating "how many cuts," yet at Warsh's debut, the conversation had shifted to "how many hikes."

Warsh simply said, "Look at the data."

All three major U.S. stock indexes sold off sharply, with the Nasdaq falling over 1%. The crypto market reacted even more violently. Bitcoin, which had been recovering above $65,000, dropped directly to around $64,000 following the meeting outcome—a decline of nearly 3%.

Scrolling through financial media analyses, some crypto investors sought explanations for "looking at the data," only to plunge deeper into a haze of terminology. A barrage of jargon followed: the CPI month-over-month hitting a new high, PPI producer prices not yet fully transmitted; then May's nonfarm payrolls far exceeding expectations, with the previous two months' data requiring "upward revisions." What frustrated crypto investors most was the Fed's own updated Summary of Economic Projections (SEP), filled with terms like PCE, core PCE, and a downward shift in the dot plot's median…

Reading these dense professional interpretations did not bring clarity but instead evoked a strong sense of powerlessness. In the eyes of financial media, these data points are interwoven with clear causal relationships. But for most people, these acronyms and their implications feel like an entirely new language—each word is familiar, but strung together, it makes no sense.

To truly understand this meeting, one seems to need a full grasp of TradFi (Traditional Finance): how inflation works, how interest rates function, and how the Fed's decision-making mechanism operates. But today, a crypto investor must track the same things as traditional financial market investors—Fed meetings, geopolitical conditions, the U.S. dollar index, and global liquidity. After all, as the integration of crypto and traditional finance grows tighter, crypto is no longer an isolated island but part of the global asset landscape, rising and falling with the dollar, U.S. Treasuries, and risk appetite.

In a multi-asset era, crypto investors need to learn TradFi more than ever

In the early days, the ups and downs of the crypto market were not closely tied to the ebb and flow of the global economy. In recent years, with the ICO boom and the rise of meme coins, crypto investors have become accustomed to tracking on-chain capital flows, the buying and selling moves of whales, and following the latest industry tech trends to find investment targets.

The Fed's FOMC meetings, nonfarm payroll data, and CPI—information that traditional financial investors must monitor—were not as critical for crypto investors.

But starting in 2024, the correlation between crypto price movements and the macroeconomy has grown increasingly tight. In January of that year, the spot Bitcoin ETF was officially approved for listing in the U.S., and six months later, the spot Ethereum ETF followed. For the first time, Wall Street money could openly and massively buy Bitcoin and other cryptocurrencies. After traditional asset management giants like BlackRock and Fidelity stepped in, crypto assets, like stocks and bonds, were placed on the same balance sheet, rising and falling according to the same macro logic. As the bond between crypto and macro finance deepens, everyone is now forced to learn TradFi-related knowledge.

For most crypto traders, this is no easy task. For instance, ahead of the June 17 meeting, many crypto players, unfamiliar with the terms "hawkish" and "dovish," had defaulted Warsh as a dove—after all, he was a Trump appointee, so he should favor easing. But in reality, hawkish and dovish are not political stances; they reflect a central banker's judgment based on current data: if inflation is high, the bias is toward raising rates to control prices (hawkish); if the economy is weak, the bias is toward cutting rates to stimulate (dovish). When Warsh took office, inflation was at 4.2%—he couldn't ignore the data. A single misunderstood term led to an incorrect judgment.

Financial education should be simpler

If you wanted to learn the real meaning of the concepts discussed at the meeting after it concluded, a quick search would yield either long, thesis-like analyses or professional textbooks laden with English acronyms. But what the average investor really wants is simple learning content: something that explains what something is and why it matters in plain language.

The barrier to traditional financial education has always been high. Terminology is dense, and the expression style is academic, as if the reader is expected to already have a certain financial foundation to be qualified to read further. But for many coming from the on-chain world, that very "foundation" shaped by traditional financial academia is precisely what they lack.

Yet the best education often starts with the simplest questions. For example, what is a stock? Why do companies go public? Why does gold rise when war breaks out? What does a rate cut actually mean? What exactly is an ETF? These questions may sound so basic as to be "naive," but the process of learning new knowledge is precisely about understanding these "naive" questions step by step before one can grasp more complex logic.

I noticed an investor education series—"TradFi 101: One Hundred Questions", initiated by Bitget in collaboration with industry partners. Its approach closely matches the kind of basic financial learning I had in mind.

Today, TradFi and Crypto are undoubtedly becoming more intertwined. Major exchanges have already listed U.S. stocks, gold, and other traditional financial asset RWAs. The barriers between crypto and traditional finance are rapidly dissolving, and cross-asset trading has become a clear development trend. However, most platforms in the industry focus solely on expanding trading categories and enriching product tracks, with few taking the time to address investors' core pain point—that the vast majority of native crypto players lack a complete, accessible foundation in traditional financial knowledge. Launching a systematic financial education series at this juncture may not be a quick path to traffic or revenue, but it is a difficult but necessary endeavor.

According to the official introduction, "TradFi 101: One Hundred Questions" breaks down traditional financial learning into 100 specific small questions, grouped into six modules: from the most basic "Rethinking Money and Markets," to "What Exactly Are Assets Like Stocks and ETFs?" then "How Do Order Books, Leverage, and Market Makers Work?" followed by macroeconomics, trading psychology, and finally, a look at the deeply integrated future of TradFi and Crypto. With video animations, it breaks down the contents of a thick financial textbook into a series of short, engaging videos.

The crypto industry has long passed its frontier days of solely tracking on-chain data. Institutional capital brought by ETFs and real-world assets unlocked by RWAs have firmly placed Crypto within the global liquidity cycle. The future financial market will undoubtedly be two-way: traditional financial assets moving on-chain, and crypto assets being included in global asset allocation lists.

Today, the boundary between TradFi and Crypto is becoming increasingly blurred. The ability to navigate freely between them and understand each other's language will be the true advantage for the next generation of investors.