Federal Reserve Board Member Waller: The cryptocurrency frenzy triggered by Trump is waning, and the market is returning to fundamentals.

At a conference in La Jolla, California, Federal Reserve Board Member Christopher Waller sent a clear signal to the global financial community: the crypto market frenzy that began with Trump’s election is gradually calming down amid sharp wake-up calls.

Federal Reserve Board Member Christopher Waller bluntly stated on Monday at a conference hosted by the Center for Interdependence in La Jolla, California, that the “mania” flooding into the cryptocurrency market since the Trump administration took office last year is significantly waning. He attributed this correction to two core factors: ongoing policy and regulatory uncertainty, and large-scale position adjustments by mainstream financial institutions driven by risk management needs.

Top-Level Tone: Waller’s View on Sentiment Cycles and Market Reality

Waller’s remarks offer an interpretation of recent turbulence in the crypto markets from the perspective of the highest monetary policy decision-makers. He clearly indicated that large fluctuations in the crypto market are normal.

“Some of the enthusiasm that accompanied the current government’s entry into the crypto space is gradually fading,” Waller described the current market shift during the conference. He recalled that a few years ago, if someone said Bitcoin was worth $10,000, people would find it unbelievable — a sign of how much the market has changed.

Waller emphasized the key role of institutional behavior. He pointed out that large sell-offs stem from companies entering the crypto market from mainstream finance, adjusting risk positions as needed. This confirms a fundamental change: cryptocurrencies are no longer solely retail-driven, and their connection to traditional finance is deepening. The actions of institutions can now trigger significant market movements.

Market Status: Deep Corrections and Cautious Signals in Derivatives

Current market data clearly confirm the “mania is fading” assessment. This correction is described by some observers as one of the most intense since the 2022 “crypto winter.”

Bitcoin’s price has fallen sharply from its peak at the end of 2025. According to Gate’s data, as of February 10, 2026, Bitcoin was priced at $70,158.5, with a market cap of $1.41 trillion.

Despite this, the market remains cautious, especially evident in the derivatives sector.

• Funding Rates and Open Interest: Perpetual Bitcoin contracts have maintained negative funding rates, meaning shorts pay longs, reflecting defensive positioning against downside risk. Meanwhile, open interest in futures has shrunk by about 50% since its peak in October 2025, indicating reduced leverage participation and a lack of strong new capital backing the recent rebound.
• Options Market Skew: Risk appetite in options markets remains cautious. Although implied volatility for Bitcoin has declined from recent highs, the skew for 25-delta call and put options still favors puts, indicating persistent demand for downside protection.

By early February 2026, Bitcoin’s trading range has retreated from its all-time high to between $60,000 and $70,000, aligning with the cautious signals from derivatives markets and painting a picture of a market that, after fervor, is seeking balance again.

Regulatory Maze: Legislative Stagnation and the Fed’s “Slimming” Plan

Market confusion and volatility largely stem from uncertain regulatory prospects. Waller revealed that the “Clear Act,” aimed at establishing comprehensive regulation for cryptocurrencies, has stalled in Congress.

“The Clear Act seems to be at a standstill in Congress,” Waller said. “Lawmakers are divided on many issues and seem unable to make breakthroughs to pass legislation.” This legislative deadlock adds to policy uncertainty, dampening long-term institutional confidence. Meanwhile, the Fed is advancing its cautious integration plan. Waller announced that the Fed plans to launch a “lite” version of its main account by the end of 2026.

Unlike traditional Fed main accounts, this “lite” version will have limited functions, such as not paying interest on balances and not accessing the discount window for financing. This move is seen as the Fed cautiously opening its payment system to crypto institutions while maintaining strict firewalls, reflecting a conflicted and cautious regulatory stance.

Gate Perspective: Current Market Conditions and Observations

Against the backdrop of top-level tone-setting and macro uncertainty, short-term market volatility has intensified. As a leading global trading platform, Gate’s real-time data offers a window into market sentiment.

The table below summarizes key data for major cryptocurrencies as of February 10, 2026:

From the data, the market has entered a consolidation phase after the sell-off. Ethereum shows a slight intraday rebound, while Bitcoin remains under mild pressure. With a total market cap exceeding $1.4 trillion and Bitcoin’s dominance at 56.14%, Bitcoin’s asset position remains solid, though overall trading activity has cooled compared to the frenzy period.

Future Outlook: From Sentiment-Driven to Value Discovery

Waller’s comments serve as a mirror reflecting the growing pains of the crypto market. As the market shifts from being driven by political narratives and hype to being deeply linked with macroeconomic factors, regulation, and institutional flows, its volatility logic will fundamentally change.

In the short term, the market may need to digest multiple uncertainties. Besides regulatory ambiguity, macro risks such as monetary policy paths of major economies and geopolitical tensions remain intense. Under these conditions, the market is more likely to enter a phase of consolidation driven by fundamentals and technicals rather than rapid, one-sided surges.

In the long run, the fading of hype is not necessarily a bad thing. It forces projects, investors, and regulators to return to rationality, pushing the industry from speculative concepts toward building real value and practical applications. Reduced volatility and increased institutional involvement are essential steps for crypto to integrate into the broader financial world. As market noise diminishes, genuine technological innovation and sustainable business models will be able to shine.