Federal Reserve Governor Christopher Waller said the optimism that propelled the market higher after the election of U.S. President Donald Trump may now be fading as a wave of selling hits the cryptocurrency market. “With the current administration coming into power, there’s been some frenzy in the cryptocurrency world, and some of that is fading,” Waller said Monday while attending a conference hosted by the Global Interdependence Center in La Jolla, California.
The Fed governor said that ups and downs in the cryptocurrency market are common and that recent volatility may be driven by regulatory uncertainty and actions taken by large financial companies for risk management.
"I think a lot of the sell-off came from companies coming into it from mainstream finance having to adjust their risk positions, selling, and a lot of other things," he said.
Waller’s comments underscore how the cryptocurrency market is increasingly entangled with the broader financial system. While policymakers have traditionally viewed digital assets as a fringe area or driven by retail investors, the industry’s increasing access to institutional balance sheets through channels such as hedge funds, institutions’ trading arms and exchange-traded funds has increased its visibility in policy circles.
Bitcoin is down more than 40% from its October high and is part of a broader digital asset pullback. Last week, Bitcoin fell sharply to $60,033, its lowest level since October 2024, triggering the biggest spike in volatility since the collapse of cryptocurrency exchange FTX in 2022.