Bitcoin Retreats From Its May High as Rate-Hike Bets Build
Bitcoin eased to just under $79,000 on Thursday, slipping roughly 1% after briefly breaking above $80,000 for the first time since May. The pullback came as short-dated Treasury yields ticked up overnight, a sign traders are starting to price in the odds of an interest-rate increase rather than the rate cut many had been betting on just a week earlier.
The shift matters because lower yields were a major driver behind bitcoin's climb from below $68,000 the previous week. All eyes are now on Federal Reserve Chair Kevin Warsh, who delivers his first Jackson Hole keynote as chair on Friday — just three weeks ahead of the Fed's September 15–16 rate decision.
The pullback wasn't universal. Solana bucked the broader trend, climbing nearly 4% to just above $101 and holding a 19% weekly gain, while ether added roughly 1%. XRP fared worst among major tokens, dropping close to 3% even though it still leads the group with a 28% weekly gain. Bitcoin's own seven-day gain has narrowed sharply, down to about 14% from 23% a day earlier, as last week's rally rolls out of the trailing window.
Market strategists note that technical indicators are stretched on daily charts, though overbought conditions don't automatically trigger a reversal. Analysts point to bitcoin's May high near $82,820 as the next key level — a break above it could open the door toward $100,000. At the same time, some trading desks caution that falling open interest suggests the rally is being driven more by short-covering than by fresh institutional buying, with spot ETF inflows currently supplying the more durable demand.
SEC Restarts a Crypto Custody Rule After Its Last Attempt Collapsed
While traders watch the Fed, U.S. regulators are moving on a separate front. The Securities and Exchange Commission has taken early steps toward a new rule governing how investment advisers may custody clients' crypto assets, sending an initial proposal to the White House Office of Management and Budget for review — the first formal stage before a rule can be publicly proposed.
This isn't the SEC's first attempt. Back in 2023, under then-Chair Gary Gensler, the agency tried to narrowly limit crypto custody to a small list of "qualified custodians" — largely banks, trust companies, and registered broker-dealers. That plan drew sharp pushback from across the industry, including objections from the Small Business Administration's own legal staff and criticism from investment firm a16z. The proposal never reached final approval and was formally withdrawn in 2025.
This time, under Chairman Paul Atkins, the tone appears markedly friendlier to the crypto industry. The SEC's public description of the new effort says it aims to "modernize" custody regulations and remove outdated burdens that no longer serve investor protection, rather than restrict where advisers can hold digital assets. It follows the SEC's recently unveiled "Regulation Crypto Assets" proposal and sits alongside a separate, upcoming effort to clarify crypto rules for broker-dealers.
The agency has floated an October timeline for a formal proposal, though the SEC's own track record on self-imposed deadlines has been inconsistent — its Regulation Crypto Assets proposal was originally slated for April and didn't land until August.
What This Means for U.S. Crypto Markets
Together, these two threads — a market recalibrating around Fed policy and a regulator laying the groundwork for clearer custody rules — capture where U.S. crypto stands heading into the fall. Short-term price action remains hostage to macro signals, with Warsh's Jackson Hole remarks likely to set the tone for the next leg in bitcoin's trade. Longer term, a friendlier custody framework could remove a structural barrier that has kept some registered investment advisers on the sidelines, potentially widening the base of institutional capital able to hold crypto directly. Traders watching both stories should treat Friday's Fed commentary as the more immediate catalyst, with the SEC's custody rulemaking a slower-moving but potentially more durable tailwind for adoption.
