TL;DR
- Kashkari called the crypto industry “utterly useless” at the Midwest Economic Outlook Summit, adding reputational pressure to a macro backdrop.
- Fed minutes showed limited support for rate cuts; Michael Faulkender said deregulation, tax reform, and energy could lift productivity, projecting 5% growth with inflation below 1%.
- He warned stablecoins could reduce bank deposits and lending, said cross-border conversions restore friction, and argued tighter policy plus skepticism could cap risk appetite.
Bitcoin and altcoins are running into a tougher macro narrative after Federal Reserve signals and unusually blunt commentary from Minneapolis Fed President Neel Kashkari. The key development is that monetary-policy patience is colliding with a direct attack on crypto’s value proposition. In remarks at the Midwest Economic Outlook Summit, Kashkari said crypto has been around for more than a decade and is “utterly useless,” a line that immediately reframed the sector as a policy and reputation risk, not just a market beta. That tone lands as investors debate if tight conditions persist across risk assets.
Rates, productivity, and the stablecoin flashpoint
Recent Fed minutes show limited support for cutting interest rates anytime soon, with some regional Fed presidents even discussing the possibility of raising rates instead. Rate-cut expectations are being pushed out as officials and former policymakers argue the economy may not need immediate easing. Former Deputy Treasury Secretary Michael Faulkender said deregulation, tax reform, and energy expansion could lift productivity and allow growth without reigniting inflation, adding that models may underestimate gains materially from artificial intelligence and energy development. In that discussion, growth of 5% with inflation below 1% was described as possible in 2026.
Kashkari then aimed his critique at crypto’s most cited real-world pitch points. His thesis is that crypto fails the everyday-utility test and could still create banking-side pressure through stablecoins. He contrasted digital assets with AI, arguing AI has clear economic value while crypto has not shown it solves real problems. He warned that widespread stablecoin use could drain bank deposits and reduce lending capacity. He also mocked vague explanations, urging people to ask basic questions and avoid what he called “word salad nonsense answers” about value. He said cross-border conversions add costs and friction again.
For markets, the combination of hawkish-leaning minutes and a senior Fed official questioning crypto’s usefulness sharpens the near-term setup. The practical takeaway is tighter liquidity plus louder skepticism, which can widen regulatory uncertainty and keep risk appetite capped. The report noted digital assets often react strongly to Fed policy signals; if cuts are delayed and policy stays tight, conditions may remain restrictive for Bitcoin and altcoins. Public critiques of stablecoins, banking risks, and cross-border payment claims can influence how lawmakers and regulators frame guardrails, disclosure expectations, and enforcement priorities going forward over the next quarter.
