Federal Reserve Governor Christopher Waller suggested that part of the recent weakness reflects a cooling of the post-election enthusiasm that had buoyed crypto prices on expectations of a more supportive political and regulatory climate under Trump
Federal Reserve Governor Christopher Waller said optimism that swept through cryptocurrency markets after President Donald Trump’s election is beginning to fade, as a sharp selloff tests investor conviction.
“Some of the euphoria that came into the crypto world with the current administration, some of that’s kind of fading,” Waller said on Monday at a conference hosted by the Global Interdependence Center in La Jolla, California.
His remarks come amid renewed turbulence in digital assets, with Bitcoin retreating sharply from recent highs and volatility spiking across the broader crypto complex.
Fading Trump-induced momentum
Waller suggested that part of the recent weakness reflects a cooling of the post-election enthusiasm that had buoyed crypto prices on expectations of a more supportive political and regulatory climate under Trump.
At the same time, he emphasised that boom-and-bust cycles are inherent to the asset class.
“These kind of ups and downs in the crypto world have become so common, they actually have a name for them — winters,” Waller said. “When you start saying something as a season, you know it’s going to be a regular phenomenon.”
“That’s part of the game. You get in, you make some money, you might lose some money. That’s the nature of the beast.”
He also pointed to the failure to pass the proposed “Clarity Act”—legislation seen by parts of the industry as critical to establishing clearer regulatory guardrails—as a factor that may have dampened investor sentiment.
“The lack of passing of the Clarity Act, I think, has kind of, again, put people off on this,” Waller said.
Mainstream finance impact
The Fed governor underscored how crypto’s deeper integration with mainstream finance is amplifying price swings. As hedge funds, trading desks and exchange-traded products have expanded exposure to digital assets, portfolio rebalancing and risk-management adjustments have become more influential drivers of market moves.
“A lot of it has been brought into the mainstream finance, and then things have to happen there,” Waller said. “I think there was a lot of selloff just because firms that got into it from the mainstream finance had to adjust their risk positions, sell, lots of other things.”
Bitcoin has slumped over 40 per cent from its October high, unwinding much of the rally that had been fuelled by hopes of deeper institutional participation and a more favourable political backdrop. The selloff intensified last week when the cryptocurrency tumbled to $60,033—its weakest level since October 2024.
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