Federal Reserve Governor Christopher Waller delivered a cold dose of reality to digital asset markets Monday, declaring the post-election “euphoria” officially over. Speaking at the Global Interdependence Center in La Jolla, Waller attributed the recent market cooling not to a single catalyst, but to a structural shift: the heavy hand of traditional finance (TradFi) risk management.
“Some of the euphoria that came into the crypto world with the current administration, some of that’s kind of fading,” Waller stated.
The TradFi Drag
The Governor’s comments come as Bitcoin struggles to hold $69,000, down nearly 45% from its October 2025 peak of ~$126,000. Waller argued this volatility is no longer just retail panic, but institutional recalibration.
As mainstream firms integrated crypto strategies following 2024’s pro-crypto administrative shifts, they bound the asset class to conventional risk models. When broader markets wobble, these firms don’t HODL. They de-risk.
“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,” Christopher Waller
Legislative Deadlock
Waller also pointed to a stalled Capitol Hill as a key dampener. The “CLARITY Act”, a market structure bill widely expected to pass, has hit a wall in Congress. The sticking point? Stablecoin yields.
Banking lobbies have reportedly entrenched themselves against provisions allowing stablecoin issuers to offer yield, viewing it as a direct threat to low-interest commercial bank deposits. “The lack of passing of the clarity act has kind of put people off,” Waller noted, signaling that regulatory certainty remains distant.
‘Skinny’ Accounts & Market Apathy
Despite the bearish tone, Waller confirmed the Fed plans to roll out “skinny master accounts” by year-end. This would grant eligible fintech and crypto firms limited access to the Fed’s payment rails without full banking privileges, a long-sought upgrade for non-bank issuers.
Regarding the price action, the Governor remained unfazed. He dismissed the drop to the $60,000 range as noise, reminding attendees that $10,000 was considered “crazy” just eight years ago.
“Prices go up. Prices go down,” Waller said. “It’s part of the game. If you don’t like it, don’t get in.”
