The surge of optimism that swept through cryptocurrency markets after the U.S. election is beginning to cool, according to Christopher Waller, a governor at the Federal Reserve.
Key Takeaways
Post-election crypto enthusiasm is fading, bringing back higher volatility
Institutional risk rebalancing is driving recent market pressure
Regulatory uncertainty in Congress is weighing on sentiment
Speaking on February 9, 2026, Waller said recent price swings reflect a return to more familiar market dynamics rather than a fundamental breakdown.
Addressing a conference hosted by the Global Interdependence Center in La Jolla, California, Waller pointed to institutional repositioning and unresolved regulatory questions as key forces behind the latest bout of volatility across digital assets.
Market Frenzy Cools as TradFi Rebalances
Waller said the post-election “frenzy” in crypto markets is fading as digital assets become increasingly intertwined with traditional finance. As large financial firms reassess risk following sharp price moves, forced selling has amplified short-term declines.
He framed the turbulence as a natural feature of the asset class, noting that investors uncomfortable with sharp swings should reconsider their exposure. In his view, volatility remains “part of the game” as crypto matures alongside conventional markets.
Regulatory Gridlock Weighs on Sentiment
Uncertainty in Washington has added to investor caution. Waller highlighted the stalled Clarity Act in Congress as a major source of hesitation, with market participants increasingly wary of committing capital without clearer rules for the sector.
The lack of legislative progress, he suggested, has become more visible now that speculative momentum from the election has begun to fade.
Despite repeated market sell-offs, Waller stressed that crypto remains largely outside the core financial system. Even during major drawdowns, banks continue operating and payment infrastructure remains unaffected, reinforcing the Fed’s view that digital assets do not currently pose systemic risk.
Fed Eyes “Payment Accounts” for Crypto Firms
Looking ahead, Waller said the Federal Reserve plans to introduce so-called “skinny” master accounts by the end of 2026. These payment accounts would allow fintech and crypto firms limited access to Fed payment rails, including FedNow, while excluding privileges such as earning interest or tapping the discount window.
The move is aimed at modernizing payment access without extending full banking benefits to non-banks.
