Fed’s Waller Calls Top on Trump Trade: ‘Euphoria Is Fading’ as BTC Holds $70K
Fed Governor Waller says the post-election “euphoria” is dead as Bitcoin corrects 40% from highs, pointing to stalled legislation and institutional de-risking.
The Trump Pump is Officially Over
Federal Reserve Governor Christopher Waller delivered a reality check to the digital asset market on Monday, declaring that the political tailwinds which drove Bitcoin to its $126,000 peak have evaporated. Speaking at the Global Interdependence Center conference in La Jolla, Waller attributed the current 40% drawdown not to systemic failure, but to a rational unwinding of the “Trump trade” that dominated 2025.
“Some of the euphoria that came into the crypto world with the current administration, some of that’s kind of fading,” Waller stated, directly linking the sell-off to the stalled legislative momentum in Washington. Bitcoin (BTC) barely reacted to the comments, hovering near $70,036 (-0.6%), while Ethereum (ETH) struggled to reclaim $2,100.
Institutional De-Risking, Not Retail Panic
Waller framed the collapse from the $126,000 highs as a mechanical de-risking event by TradFi entrants rather than a loss of faith in the technology. “Firms that got into it from mainstream finance had to adjust their risk positions,” he noted. The implication is clear: the “tourist capital” that flooded in post-election is washing out.
“Ups and downs in the crypto world have become so common they actually have a name for them: winters. It’s part of the game.”
The Legislative Void: CLARITY Act Stalls
The Governor’s bearish tone on sentiment was matched by his assessment of Capitol Hill. Waller highlighted that the CLARITY Act, a bill the industry pinned its market structure hopes on, is effectively deadlocked. The lack of legislative progress has forced institutions to retreat to the sidelines, leaving price action vulnerable to macro gravity.
The Pivot: ‘Skinny’ Accounts by Year-End
While the legislative path crumbles, the Fed is moving forward with its own infrastructure. Waller confirmed the central bank aims to finalize its “skinny master account” framework by the end of 2026. These accounts would grant fintechs and stablecoin issuers direct access to Fed payment rails (FedNow, Fedwire) without the full privileges of a bank charter.
The terms are strict: No interest on balances. No access to the discount window.
Waller admitted the proposal has enraged both sides of the aisle. “Everyone is yelling at me,” he quipped, noting that banks are demanding stricter guardrails against fintechs, while crypto firms are balking at the stripped-down utility. For the Fed, however, this tiered access represents the only viable middle ground between stifling innovation and opening the floodgates to unregulated risk.
