Governor Fed Christopher Waller called crypto market volatility ‘part of the game.’ In his opinion, the recent decline is related to the activity of companies from the traditional financial sector.
He noted that the hype around cryptocurrencies after the victory of Donald Trump is gradually fading. The market is becoming more deeply integrated into traditional finance, and with this, participant behavior is changing.
‘Part of the euphoria that came to the crypto world with the current administration is gradually fading away,’ he said at a conference on Monday.
Waller emphasized that as it integrates into traditional finance, the crypto market begins to follow its logic.
‘When an asset becomes part of the traditional financial system, companies reassess their risk profile. A significant part of the sell-off is due to this,’ he noted.
During the Trump administration, traditional finance’s involvement in crypto assets grew significantly. This supported the market. However, Congress has still not passed a law on the structure of the crypto market. According to Waller, such uncertainty also restrains investor sentiment.
‘You enter the market, you can make money, or you can lose money. That is the nature of this market,’ Waller said.
Bitcoin is now trading around $69,500. Since October, when the price peaked at $125,000, the asset has lost about 45%. On Friday, quotes briefly dropped below $60,000.
‘Prices go up, prices go down. This is normal business dynamics. If this does not suit you, do not enter this market. That is my advice,’ he added.
The Fed Plans to Launch ‘Master Accounts’ This Year
The Fed is preparing to launch payment accounts this year, said Christopher Waller. The idea is to give fintech and crypto companies limited access to the central bank’s infrastructure.
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The discussion of the initiative lasted until Friday. In the industry, such accounts have already been nicknamed ‘skinny master accounts.’ Crypto companies supported the initiative, while banking associations asked not to rush and to assess the risks.
‘We received a lot of feedback and now have to sort it all out. If we can work out the details properly, we would like to close the issue by the end of the year,’ Waller said.
According to the Fed’s plan, the new accounts will be significantly lighter than the classic master accounts of large banks. Holders of such accounts will not be able to receive interest income. There will also be balance restrictions.
Earlier, Waller explained that the format should allow for innovation while not diluting the security of the payment system. He links the initiative to the fact that payment technologies are changing too quickly for the regulator to remain on the sidelines.
