(Feb 10) : Federal Reserve Governor Christopher Waller said initial optimism that lifted crypto markets after President Donald Trump was elected may now be fading amid a selloff that has rattled the asset class.
“Some of the euphoria that came into the crypto world with the current administration, some of that’s kind of fading,” Waller said Monday in La Jolla, California, during a conference hosted by the Global Interdependence Center.
The Fed governor said ups and downs are common in the crypto market, and recent volatility could be driven by regulatory uncertainty and risk-management moves by larger financial firms.
“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,” he said.
Waller’s comments underscore how crypto markets are becoming increasingly entangled with the broader financial system. While policymakers have traditionally treated digital assets as fringe or retail-driven, the sector’s growing exposure to institutional balance sheets — via hedge funds, trading desks and exchange-traded funds — has elevated its visibility within policy circles.
Bitcoin has fallen more than 40% from its October peak, part of a broader digital-asset drawdown that’s eroded gains built on expectations of institutional adoption and a supportive political climate. Last week’s sharp drop in Bitcoin to US$60,033 — its lowest since October 2024 — triggered the biggest spike in volatility since the 2022 collapse of cryptocurrency exchange FTX.
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