After a decade in traditional finance within Goldman Sachs' investment banking division, Hong Fang made the move to crypto. In 2019, she joined Okcoin, a global crypto exchange where she eventually became the CEO.
Her transition to the digital sector was accompanied by the belief that blockchain technology will disrupt the financial sector and fix many issues within the centralized monetary system. She specifically highlighted the imbalances created by a monetary supply system that is controlled by central entities.
One key matter she continually pointed to is the printing of money which has led to inflation. In an effort to curb the pandemic's impact on the economy, the Federal Reserve slashed interest rates, implemented quantitative easing, and created lending programs. The monetary stimulus eventually led to inflation which resulted in overvalued equities and real estate. Fang noted that the Central Bank's movements are now among the biggest decision-making points for investors.
Meanwhile, the reality for most people is that inflation-adjusted wages continue to slip. Those who aren't investors must now also manage their money so that its value isn't depleted over time, she noted.
"The money, when printed out of nowhere, has nowhere to go," Fang said. "It has to go into the capital markets to pursue yields. And that basically perpetuates the treadmill that every one of us is on."
Fang believes Blockchain technology will decentralize the financial and monetary system in two ways: On the first layer, bitcoin could become a global currency. However, she admits that this process will require a long cultural and geopolitical process. The second layer is through the internet. The shift to web3, which integrates the elements of decentralized ownership into the internet through crypto and NFTs, will take power away from entities and give it directly to users. This means instead of large tech companies and social media giants holding user data, content, and assets, people will.
This type of decentralization will first disrupt things that are purely digital and online, she said. Sectors such as the financial industry, communications, and social media will face competition from crypto-native platforms. Facebook and Twitter may not survive the transition into web3, she added.
As for investors, Fang believes they should bet on people rather than companies because managing the transition will require visionary leaders who can make drastic moves. Personally, she would bet on Block because CEO Jack Dorsey is forceful, innovative, decisive, and a visionary.
On the topic of NFTs, Fang highlights a couple of main points: First, if you're going to invest in this asset class, you need to remain careful with your money. Second, NFTs will have more utility in things such as digital identities, the forming of communities, and gaming.