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Bitcoin traded below $85,000 late Friday, Oct. 2, after briefly rising above $87,000, as investors weighed a U.S. Securities and Exchange Commission proposal to revise custody rules for investment advisers and funds. The proposal may give regulated institutions additional ways to hold some crypto assets, but it remains subject to public comment and is not yet in force.
Bitcoin was quoted at $84,612.40 at 9:55 p.m. Eastern time, down 0.35% at that snapshot after reaching an intraday high of $87,219, according to Investing.com. The earlier move above $87,000 was the cryptocurrency’s first since Sept. 23. The report also said bitcoin had spent much of the previous session around $84,500 to $85,000.
The price action coincided with a weaker-than-expected U.S. employment report and the SEC’s regulatory announcement, leaving traders to assess both near-term economic conditions and a potential longer-term change to institutional custody options. The available reporting does not establish that the SEC proposal caused bitcoin’s intraday move.
SEC outlines a tailored custody framework
On Oct. 1, the SEC proposed rules and amendments covering custody of crypto assets by registered investment advisers and regulated funds, including registered investment companies and business development companies. The agency said the changes are intended to update requirements under the Investment Advisers Act of 1940 and the Investment Company Act of 1940.
The proposal would permit crypto assets to be held in self-custody in certain circumstances and allow state trust companies to act as custodians for client and fund assets. The SEC’s announcement also described changes to requirements involving financial-statement audits for registered advisers and broker-dealer custodial services for regulated funds.
Investing.com reported that the proposed framework could let advisers and funds directly hold certain digital assets when a qualified third-party custodian is unavailable, subject to safeguards. The SEC says the proposal is meant to address regulatory barriers and expand access to crypto-related investment strategies. The rules would not automatically authorize every institution to hold every token: the proposal is limited to the covered entities and would apply under specified conditions.
The Commission’s public comment period is set to run for 60 days after the proposing release is published in the Federal Register. Until the proposal is considered and finalized, the existing rules remain in effect. The SEC has not announced an adoption date in its press release.
Jobs data added another market factor
U.S. nonfarm payrolls increased by 29,000 in September, below the 90,000 increase expected, according to Investing.com’s report. The outlet said Treasury yields and the dollar declined as markets reassessed the Federal Reserve interest-rate outlook following the data.
The employment figures offered a separate potential influence on market sentiment from the custody announcement. The report described the softer data as providing some support to bitcoin, but did not provide enough evidence to quantify how much of the cryptocurrency’s move was attributable to the jobs release, regulatory news, or other trading activity.
Leveraged positioning also shifted during the move. Citing CoinGlass data, Investing.com reported that about $142 million of bitcoin short positions were liquidated over 24 hours, compared with roughly $29 million in long positions. Liquidations occur when exchanges close leveraged positions after traders’ collateral or margin falls below required levels; the figures describe forced position closures, not direct measures of spot-market purchases.
Institutional access remains a proposal, not an outcome
SEC Chairman Paul Atkins said in the agency’s announcement that the crypto market had grown substantially since Bitcoin’s launch and that existing regulations had not kept pace. The agency framed its proposal as a route for advisers and funds to operate under a more tailored custody framework, while the public comment process leaves the details open to feedback and possible revision.
For institutional investors, custody rules matter because advisers and funds must meet legal obligations when safeguarding client assets. The SEC’s proposed allowance for state trust companies and conditional self-custody could broaden the options available to covered entities, but the announcement does not demonstrate that institutions will increase crypto allocations or that demand will rise immediately.
The SEC’s action is focused on custody and related fund and adviser requirements, rather than a general endorsement of bitcoin or a rule governing all crypto market participants. The proposing release and subsequent agency decisions will determine the precise safeguards, eligibility conditions and implementation timetable.
Bitcoin’s close and the next regulatory step
Friday’s snapshot showed bitcoin below the $85,000 threshold after its brief move to $87,219. It remained above the levels around $84,500 to $85,000 cited for much of the prior session, but the report did not establish a durable breakout or provide a settled daily closing price.
The immediate scheduled step for the SEC proposal is publication of its proposing release in the Federal Register, which starts the 60-day comment period. The agency will then have to consider comments before deciding whether and how to adopt final rules. No final decision date was specified.
In the near term, the market report placed the price move alongside the jobs data, rate expectations and liquidations, while the custody proposal represents a longer regulatory process. The available figures and agency announcement clarify the day’s developments, but do not establish what bitcoin will do next or how many institutions may ultimately use any new custody pathway.
