"The Trump era coin party is over" Fed Governor Waller points to the cause of the Bitcoin plunge
"The Trump era coin party is over" Fed Governor Waller points to the cause of the Bitcoin plunge
"Institutional players move into risk management amid regulatory uncertainty... ETF funds flow out like a receding tide"
Christopher Waller, a key member of the U.S. Federal Reserve, recently offered a sober assessment of rising volatility in the Bitcoin market, saying that the “euphoria” that had formed in the digital asset market following the launch of the Trump administration is fading. As vague expectations for pro-cryptocurrency policies dissipate, funds that entered through the traditional financial system are now pulling back for risk management purposes.
Speaking at a conference held on the 9th (local time) in La Jolla, California, Waller evaluated the recent slide in Bitcoin prices to the low $60,000 range, which erased gains from the so-called “Trump rally,” in this context. He cited regulatory uncertainty and risk management measures by major financial institutions as the primary drivers of the downturn.
Waller explained that companies accessing digital assets through mainstream financial markets were forced to unwind risky positions and sell assets, unleashing large-scale sell-offs. This suggests that the massive institutional capital inflows following the approval of spot Bitcoin ETFs last year were among the first to cut losses once market sentiment turned. In fact, Bitcoin has recently failed to live up to its nickname as “digital gold,” losing its function as an inflation hedge and even seeing panic selling during periods of stress, exposing its limitations as a safe-haven asset.
Meanwhile, the event also touched on the independence of the Federal Reserve. Federal Reserve Governor Steven Myron said at a Boston University event that while central bank independence does lead to better policy outcomes, in times of crisis the Fed’s decisions inevitably become deeply intertwined with other institutions, making absolute independence unrealistic in practice.
*Disclaimer: This article is for investment reference purposes only, and no responsibility is assumed for any investment losses incurred based on it. The content should be interpreted solely for informational purposes.*
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