Market Reaction to Federal Reserve Comments
Bitcoin surged to nearly $114,000 on October 21, 2025, as comments by US Federal Reserve Governor Christopher Waller suggested a shift towards a blockchain-friendly stance.
The surge triggered a volatile market response, causing substantial liquidations and ETF outflows, reflecting macro-driven excitement rather than manipulative activity.
Bitcoin surged to $114,000 on October 21, following statements by a US Federal Reserve Governor about a more open approach to blockchain. This led to significant volatility and large-scale liquidations shortly afterward.
Christopher Waller, US Federal Reserve Governor, noted at the Payments Innovation Conference that this signals a new era for the Fed. There were no accusations of a "scam pump", but macro-driven excitement and profit-taking followed.
Liquidity and ETF Movements
The surge instigated over $528 million in liquidations as traders were caught in the volatility. Spot Bitcoin ETFs reported net outflows of $40 million, indicating investor caution as total net assets dipped below $150 billion.
Bitcoin futures open interest increased, pointing to renewed trader interest post-liquidations. Ethereum also participated in the gains, briefly surpassing $4,100, while altcoins like Dogecoin and Solana experienced modest increases during the event window.
Here is an update about this development from Rekt Capital on Twitter:
Market Dynamics and Future Outlook
Historical precedent shows similar market behaviors during shifts in policy and regulatory news. Caution remains as broader crypto capitalization experienced a $370 billion drop, emphasizing market sensitivity to macro and monetary signals.
Market observers cite macro-driven flows and a short squeeze as key drivers. Upcoming catalysts include ETF flow stabilization and macro policy updates. Christopher Waller, Governor, US Federal Reserve, stated, "I wanted to send a message that this is a new era for the Federal Reserve in payments—the defi industry is not viewed with suspicion or scorn." The response indicates investor positioning remains cautious, focusing on Bitcoin's $108K-111K support levels.