Fed’s Waller: Trump-Driven Crypto Euphoria Fades as TradFi Ties Deepen
Federal Reserve Governor Chris Waller says the wave of excitement that hit crypto after President Donald Trump’s election win is slowly...
Quick overview
- Federal Reserve Governor Chris Waller notes that the initial excitement in crypto following Trump's election is waning, as the market integrates more with traditional finance.
- He attributes recent price declines to institutional selling pressure and the lack of a clear regulatory framework from Congress.
- Waller emphasizes that volatility is inherent in crypto, advising those who can't handle losses to avoid the market.
- The Fed plans to introduce limited 'skinny' payment accounts for fintech and crypto firms this year, aiming to enhance safety in digital payments.
Federal Reserve Governor Chris Waller says the wave of excitement that hit crypto after President Donald Trump’s election win is slowly fading. Speaking at a conference on Monday, he argued that the market now looks less like a rebellious digital experiment and more like part of regular Wall Street finance.
Waller said that as traditional banks, hedge funds, and big financial firms entered crypto, the market became tied to mainstream finance. When those firms had to rebalance risk or cut exposure, selling pressure followed — which helped push prices down. In his view, this explains much of the recent slump rather than any single crypto failure.
He also pointed to Washington politics. Congress has still not passed a clear crypto market structure bill, leaving rules uncertain. Waller said this regulatory fog has “put people off,” because institutions prefer clear laws before making long-term bets.
Despite the sell-off, Waller was relaxed. He called the drop simply “part of the game” in crypto — prices swing wildly, and that is the nature of the market. His blunt advice: if you cannot handle losses, you should probably stay out.
Bitcoin illustrates this perfectly. The world’s largest cryptocurrency has fallen 45% from its October peak of $125,000 and is now trading around $69,500. Last Friday, it briefly dipped below $60,000 before recovering. To a beginner, that is like a roller coaster — steep drops followed by shaky rebounds.
Fed’s “skinny” accounts coming this year
Waller also confirmed that the Federal Reserve plans to roll out its proposed “payment accounts,” often called skinny master accounts, this year. These are special, limited accounts that would give fintech and crypto companies some access to the Fed’s payment system.
The Fed collected public feedback on the plan up until Friday. Crypto firms largely supported the idea, saying it would make stablecoins and digital payments safer and faster. Major banking groups, however, warned that it could blur the line between tech firms and regulated banks.
Waller said the Fed received “a ton” of comments and must carefully review them. If all goes smoothly, he hopes the policy can be finalized by the end of the year.
What these accounts will — and won’t — do
These new payment accounts will have fewer privileges than normal bank master accounts. They are intentionally limited to reduce risk to the financial system.
Key limits include:
- No interest payments on balances
- Caps on how much money can be held in the account
Waller has said the goal is to “support innovation while keeping payments safe,” especially as digital payments and blockchain tools evolve rapidly.
Taken together, his message was clear: crypto is becoming more mature, more regulated, and more connected to traditional finance. That may mean less hype — but also more stability over time.
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