SEC Opens Door to Crypto Self-Custody as Weak Jobs Data Lifts Bitcoin Near $87,000

SEC Proposes a Custody Framework for Advisers and Funds

On Thursday, October 1, the SEC proposed new rules and amendments that would create a tailored framework for how registered investment advisers and regulated funds hold crypto assets. The proposal updates custody requirements under the Investment Advisers Act of 1940 and the Investment Company Act of 1940, rules written long before digital assets existed.

Two changes stand out. State trust companies would be eligible to act as custodians for client and fund crypto holdings. Advisers could also self-custody crypto in limited situations, mainly when they determine that no permitted custodian is available for a given asset. The proposal would also update audit requirements for advisers and rules for broker-dealer custodial services used by regulated funds.

SEC Chairman Paul Atkins said the current rules were built for traditional assets and left advisers without a clear path in crypto. He described the proposal as a compliant route where none existed before.

It is important to note that this is only a proposal. It is not in force, and the public will have 60 days to comment once it appears in the Federal Register. The move also comes as broader crypto legislation remains stalled in Congress, which leaves the SEC's rulemaking as the main driver of regulatory change for now.

Weak Jobs Data Gives Bitcoin a Lift

The second story came from the Bureau of Labor Statistics. The U.S. economy added just 29,000 jobs in September, far below forecasts of roughly 85,000 to 90,000. The unemployment rate rose to 4.2% from 4.1%. Revisions were also negative: July was cut to a loss of 10,000 jobs, and August was lowered to 133,000 from the initial 162,000. Wage growth cooled to about 3.0% year over year.

Markets treated the weak data as a reason to expect easier policy. The 10-year Treasury yield fell to roughly 5.17%, stock index futures moved higher, and gold rose. Bitcoin, already up on the session, gained about 2% and approached $87,000. Traders now widely expect the Federal Reserve to hold rates steady at its October 28 meeting.

Why These Two Stories Belong Together

Regulation and macroeconomics are pulling in the same direction for crypto this week. Clearer custody rules could make it easier for traditional asset managers to hold digital assets directly, while softer economic data reduces pressure from high interest rates. Neither guarantees a lasting rally. The SEC rules can still change after public comment, and the Fed's decision is weeks away.

What to Watch Next

Investors should follow the comment period on the custody proposal, upcoming inflation data, and the Fed's October 28 decision. Bitcoin's ability to hold the $87,000 area will be an early sign of whether this week's momentum can last.