According to Federal Reserve Governor Christopher Waller, the crypto market is becoming increasingly intertwined with traditional finance. He said that its recent sell-off was partly driven by financial firms' actions. Following the Trump administration’s arrival, those firms increased their exposure to digital assets but later pared back their positions after Congress failed to swiftly enact market structure legislation for cryptocurrency. The resulting regulatory uncertainty scared off large investors and dampened appetite for digital assets.

Waller noted he was not surprised by the crypto pullback, calling volatility “part of the game” with these assets. Since reaching its October high of roughly $126,000, Bitcoin has plunged by about 45% and is currently trading near $68,500 after briefly dipping to $60,000. The official warned that investors could just as easily reap gains as suffer losses, describing such volatility as simply the nature of the business. “Prices go up. Prices go down. If you don’t like it, don’t get in,” he said.

Waller also pledged that the Fed will introduce simplified, special payment accounts in 2026. These accounts will provide fintech and crypto firms with limited, direct access to the central bank system so they can collaborate with regulators. Crypto firms welcomed the plan, while traditional banks reacted more skeptically. These accounts will come with fewer privileges. Holders will not be able to earn interest, and their balances will be capped. Last year, Waller proposed allowing banks to issue dollar‑pegged stablecoins to broaden global access to the US currency. He also encouraged exploring use cases for tokenization and smart contracts in payments.