The U.S. Securities and Exchange Commission proposed new rules on October 1 aimed at clarifying how investment advisers and regulated funds can custody crypto assets. The framework would permit state-chartered trust companies to serve as custodians and, in limited circumstances, allow advisers to custody digital assets themselves when an eligible third-party custodian is unavailable. SEC Chair Paul Atkins said existing custody rules have not kept pace with the growth of digital assets. The proposal is open for public comment for 60 days and represents another step toward establishing clearer federal rules for institutional crypto participation.

Community Banks Challenge Crypto Trust Charters

The Independent Community Bankers of America sued the Office of the Comptroller of the Currency on October 2 over its policy of granting national trust bank charters to crypto companies. The banking group argues the OCC exceeded its authority and that the charters could give consumers the impression that crypto firms receive protections comparable with traditional banks. The charters can allow digital-asset custody and payment settlement but do not permit deposit-taking or lending. The case highlights the continuing debate over how crypto companies should enter regulated banking and payments infrastructure as federal agencies expand digital-asset rules.

Crypto Sentiment Holds in Greed

Crypto market sentiment remained positive at the end of the week, with the Fear & Greed Index at 67, classified as "Greed," although it eased from 72 the previous day and 74 a week earlier. Bitcoin finished the seven-day period slightly higher while Ether was broadly flat to lower, reflecting a market that remained constructive but selective. Citigroup also raised its 12-month Bitcoin and Ether forecasts on October 1, citing stronger crypto activity, supportive macro conditions and renewed ETF demand. The bank lifted its Bitcoin target to $113,000 and Ether target to $3,028.

BTCVM, LTCVM and DogecoinVM Enter Alpha on Metal Blockchain

Metal Blockchain launched BTCVM, LTCVM and DogecoinVM into alpha testing on September 29, bringing Bitcoin, Litecoin and Dogecoin onto dedicated Layer 1 networks designed for sub-second settlement. Each network remains compatible with its native chain and uses a two-way bridge, with assets locked on the original network before becoming available on the corresponding Metal L1. Once bridged, measured payment finality is about 0.15 seconds for BTCVM, 0.25 seconds for LTCVM and 0.2 seconds for DogecoinVM. The networks preserve the original coins' address formats, keys and signing models, while the bridges remain deliberately capped during alpha testing and have not yet undergone external audits.

Bitcoin ETFs opened Monday with $31.0 million in net inflows, led by BlackRock's IBIT at $54.8 million, while Fidelity's FBTC and Grayscale's GBTC recorded outflows. Tuesday strengthened to $66.2 million of net inflows as IBIT added $51.1 million and ARKB brought in $33.2 million, partly offset by $18.1 million leaving BITB. Wednesday was the week's weakest session at $148.7 million of net outflows, driven primarily by $125.6 million leaving FBTC, before Thursday reversed sharply to $102.7 million of inflows as IBIT attracted $195.6 million. Friday currently shows $31.7 million in net inflows, though BlackRock's IBIT figure is still awaiting confirmation, so the final weekly total may change.

Ethereum ETFs began Monday with $17.1 million in net inflows, led by BlackRock's ETHA at $15.4 million and TETH at $1.7 million. Tuesday reversed to $2.8 million of net outflows as withdrawals from ETHA and FETH outweighed $12.8 million flowing into Grayscale's ETH. Wednesday was the week's weakest session with $59.6 million of net outflows, led by $26.6 million from FETH and $25.5 million from ETH, while Thursday followed with another $55.4 million of withdrawals. Friday currently shows $17.3 million in net outflows, though BlackRock's ETHA figure is still awaiting confirmation, so the final weekly total may change.

Hedera was the clear seven-day standout, gaining 7.1% while most major crypto assets finished the period lower. Bitcoin was the only other tracked asset to remain positive for the week, rising 0.7%, while Ethereum limited its decline to 0.6%. Litecoin, Stellar and Solana also held up better than the broader group, while XPR Network, Cardano, XRP, Dogecoin and the Metal ecosystem tokens recorded larger weekly pullbacks. The mixed performance points to a selective market rather than a broad-based crypto rally.