Bitcoin steadies near $78,000 as SEC custody overhaul advances

Bitcoin consolidates after a 23% weekly rally while the SEC's custody rule rewrite moves through federal review.

Bitcoin steadied at $78,350, up 0.2% over 24 hours, as the SEC moved its digital asset custody rule overhaul into White House review.

The Amendments to the Custody Rules proposal was sent to the Office of Information and Regulatory Affairs on Aug. 25, a mandatory step in the federal review process, according to the SEC's regulatory filing. The regulator described the proposal as "economically significant" and "deregulatory," with publication scheduled for October 2026.

Institutional demand through US spot Bitcoin exchange-traded funds remained positive but cooled sharply, with combined net inflows of $5.8 million on Aug. 26, compared with $314.3 million on Aug. 25 and $337.6 million on Aug. 24, according to Farside Investors. August ETF inflows have already surpassed $3 billion, supporting Bitcoin's 23% rally over the previous week.

Attention now turns to Fed chair Kevin Warsh's Jackson Hole address on Friday, with expectations of easier monetary conditions underpinning crypto's recent advance. A shift in the rate outlook could determine whether Bitcoin can retest the $80,000-$81,000 region, while clearer custody rules would give traditional investment managers greater certainty over which custodians and structures meet regulatory requirements.

ETF inflows cool after $3B August run

The slowdown in ETF buying follows a strong stretch that helped push Bitcoin above $81,000 earlier in the week before profit-taking pulled it back. The Crypto Fear & Greed Index reached 74 on Tuesday, up from 27 on Aug. 12, before easing to 65 as traders locked in gains.

Ether traded at $2,467, up 1.2%, while Solana was flat at $96.65. XRP was the weakest of the majors, falling about 5% to $1.37.

SEC custody rewrite targets October 2026

The SEC's proposed changes are designed to modernize rules governing how investment advisers and investment companies hold client and fund assets, specifically addressing uncertainty around crypto custody. The regulator said advisers and funds had raised questions over how digital assets could be held while complying with existing custody requirements.

For the crypto industry, clearer rules could make it easier for traditional investment managers to hold digital assets, giving institutions greater certainty over which custodians and structures meet regulatory requirements. The proposal's "deregulatory" designation suggests the SEC intends to reduce compliance burdens rather than impose new restrictions.

Bitcoin's consolidation near $78,000 comes as the combination of continuing ETF demand and movement toward clearer US custody rules provides a more supportive institutional backdrop than prices alone suggest. The next major test is Friday's Jackson Hole address, where any shift in the Fed's rate outlook could determine whether Bitcoin can mount another challenge of the $80,000-$81,000 region.

This article is for informational purposes only and does not constitute investment advice.