At a conference in La Jolla, California, Federal Reserve Governor Christopher Waller sent a clear signal to the global financial community: the crypto market frenzy that began with Trump’s election is fading as harsh realities set in.
Federal Reserve Governor Christopher Waller spoke candidly on Monday at a conference hosted by the Center for Global Interdependence in La Jolla, California. He noted that the "feverish sentiment" that flooded into the crypto market following the Trump administration’s arrival last year is now noticeably waning. Waller attributed this adjustment to two core factors: ongoing regulatory uncertainty and large-scale position shifts by mainstream financial institutions driven by risk management needs.
Top-Level Perspective: Waller’s View on Sentiment Cycles and Market Reality
Waller’s remarks offer a high-level interpretation of the recent turbulence in the crypto market, coming directly from the highest monetary policy authority. He made it clear that major volatility in the crypto market is nothing out of the ordinary.
"Some of the feverish sentiment that entered the crypto world with the current administration is gradually fading," Waller said, describing the market’s current shift. He recalled that just a few years ago, if someone claimed Bitcoin was worth $10,000 USD, it would have seemed unbelievable—underscoring how much the market has changed.
Waller especially highlighted the pivotal role of institutional behavior. He pointed out that much of the sell-off has come from companies entering the crypto market from mainstream finance, adjusting their risk positions. This confirms a fundamental shift: crypto is no longer a domain dominated solely by retail investors. Its ties to traditional finance are deepening, and institutional moves now have outsized impacts.
Market Status: Deep Correction and Cautious Signals from the Derivatives Market
Current market data clearly supports the notion that the "frenzy is fading." Some observers describe this pullback as one of the most severe corrections since the "crypto winter" of 2022.
Bitcoin price has retreated significantly from its historic highs at the end of 2025. According to Gate market data, as of February 10, 2026, Bitcoin is trading at $70,158.5, with a market cap holding at $1.41T.
Despite this, caution still prevails, especially in the derivatives market.
- Funding rates and open interest: Bitcoin perpetual contract funding rates remain negative, meaning short sellers are paying longs, reflecting defensive positioning against downside risks. Meanwhile, total open interest in the futures market has shrunk by about 50% since its October 2025 peak, indicating a sharp drop in leveraged participation and a lack of strong consensus for fresh capital inflows during this rebound.
- Options market skew: Risk appetite in the options market is also cautious. Although Bitcoin’s implied volatility has fallen from recent highs, the 25-delta call/put options skew remains tilted toward puts, showing persistent demand for downside protection among investors.
By early February 2026, Bitcoin’s trading range had fallen from historic highs to between $60,000 and $70,000. This aligns with the cautious signals seen in the derivatives market, collectively painting a picture of a market searching for equilibrium after the frenzy has faded.
Regulatory Maze: Legislative Stalemate and the Fed’s "Slimmed-Down" Plan
Much of the market’s confusion and volatility stems from unclear regulatory prospects. Waller revealed in his speech that the "Clarity Act," aimed at providing a comprehensive regulatory framework for crypto, has stalled in Congress.
"Clarity (Act) appears to be stuck in Congress," Waller said. "Lawmakers are deeply divided on many issues, and seem unable to break through to complete legislation." This legislative gridlock undoubtedly heightens policy uncertainty across the industry and dampens institutional confidence in long-term allocation. Meanwhile, the Fed is moving forward with its own cautious integration plan. Waller announced that the Fed intends to launch a "slimmed-down main account" by the end of 2026.
Unlike traditional Fed master accounts, this "slimmed-down" version comes with limited functionality—for example, it won’t pay interest on balances or provide access to the discount window for financing. This move is seen as the Fed opening its payment system doors to crypto institutions, but only with strict firewalls in place, reflecting regulators’ conflicted and cautious stance.
Gate Perspective: Current Market Conditions and Observations
Against the backdrop of top-level guidance and macro uncertainty, short-term market volatility has intensified. As a leading global trading platform, Gate’s real-time data offers a window into the pulse of the market.
The table below summarizes key data for major crypto assets as of February 10, 2026:
| Asset | Current Price | 24h Change | 24h Volume | Total Market Cap | Market Share |
|---|---|---|---|---|---|
| Bitcoin (BTC) | $70,158.5 | -0.88% | $905.34M | $1.41T | 56.14% |
| Ethereum (ETH) | $2,110.8 | +1.02% | $266.83M | $252.82B | 10.04% |
The data shows that after the sell-off, the market has entered a phase of consolidation and volatility. Ethereum has seen a modest intraday rebound, while Bitcoin remains under slight pressure. With a market cap exceeding $1.4 trillion and a 56.14% share, Bitcoin’s asset status remains solid, but overall trading activity has cooled compared to the frenzy period.
Outlook: The Long Road from Sentiment-Driven to Value Discovery
Waller’s comments serve as a mirror, reflecting the growing pains the crypto market is experiencing. As the market shifts from being driven by political narratives and feverish sentiment to being deeply intertwined with macroeconomics, regulatory policy, and institutional capital flows, its volatility logic is fundamentally changing.
In the short term, the market will likely need to digest multiple uncertainties. Besides regulatory fog, macro disruptions—including the monetary policy paths of major global economies and geopolitical risks—remain dense. In this environment, the market is more likely to enter a consolidation phase dominated by fundamentals and technicals, rather than quickly returning to one-sided surges.
Over the long run, the fading of frenzy is not necessarily a bad thing. It forces projects, investors, and regulators to return to rationality, driving the industry from hype toward real value creation and practical applications. Lower volatility and deeper institutionalization are essential steps for crypto to integrate into the broader financial world. As market noise subsides, genuine technological innovation and sustainable business models will finally have their moment in the spotlight.
