What Did the US Government Just Drop?
The US Treasury’s financial crimes unit, FinCEN, has formally withdrawn a rule that would have forced banks and money transfer businesses to collect personal details about anyone you sent Bitcoin to, or received it from, if that person used their own wallet. Transfers above $3,000 would have needed the other person’s details recorded. Transfers above $10,000 would have been reported to the government. The rule was first proposed in December 2020, it has hung over self-custody ever since, and as of this week it is gone.
In plain terms, the rule treated holding your own Bitcoin as something suspicious that needed paperwork. It drew one of the largest volumes of public objections FinCEN has ever received. Its formal withdrawal means that if any future administration wants to bring it back, it has to start the whole rulemaking process again from scratch, with fresh proposals, fresh public comment and fresh legal scrutiny. Normal anti-money-laundering rules for exchanges are unchanged, but the specific idea of tracking people simply for using their own wallets is off the table.
FinCEN dropped a second proposal at the same time: a 2023 plan to label crypto mixing services, tools that blend transactions together to improve privacy, as a primary money laundering concern. FinCEN said the proposal risked discouraging legitimate activity and creating heavy compliance burdens, and pointed to a White House working group report that supports lawful privacy on public blockchains. That is a notable shift in tone from where Washington was only a few years ago.
The SEC Wrote Self-Custody Into the Rulebook Too
Two days earlier, the SEC proposed a new framework for how investment advisers and funds can hold crypto on behalf of their clients. The headline detail is that it allows them to hold Bitcoin directly themselves, what is known as self-custody, where no suitable specialist custodian is available, as long as they meet strict security standards. Those include proper management of private keys, two people approving any transaction, separate addresses for each client, and annual independent audits.
That matters because it would let professional money managers hold actual Bitcoin, not just shares in a Bitcoin ETF. It is also the first time a US regulator has written self-custody into the rules governing people who manage other people’s money. Commissioner Hester Peirce, who left the SEC this week after eight years and has long been crypto’s most reliable ally there, used her parting words to urge regulators to “zealously protect investors’ right to self-custody.”
There is a catch worth knowing about. With Peirce gone, the SEC now has only two commissioners out of a possible five, and in the same 48 hours it changed its own rules so that just two members, or even one, can now make decisions. It did that without the usual public consultation. That leaves the whole programme looking slightly fragile, and open to legal challenge, even as it moves in a direction Bitcoin holders will welcome.
Europe Is Heading the Other Way
The contrast across the Atlantic is striking. As the EU closed its consultation on reviewing its MiCA crypto rules, Europe’s markets regulator asked for more power, not less, including the ability to freeze crypto assets and shut down websites, and a new licensing category for anyone offering access to decentralised finance. In the same week the US withdrew wallet surveillance rules, the EU asked for wider powers to freeze and license.
In the UK, the FCA began accepting applications from crypto firms on September 30. Exchanges and custodians have until February 28, 2027 to apply. Those that miss the deadline will lose access to UK customers when the new regime begins in October 2027, so expect some firms to quietly withdraw from the UK market over the coming months.
Why Can Bitcoin Not Get Past $87,000?
Bitcoin had its best weekly close in eight months, at around $86,570, and its third weekly gain in a row. It then ran into $87,000 again on Monday and was turned back for the fourth time since September 21. That level matters more than most, because Bitcoin started 2026 at $87,570. Until it gets back above that, 2026 is still officially a down year.
The week’s biggest price driver was a genuinely weak US jobs report. The economy added only 29,000 jobs in September, against expectations of around 90,000, and earlier months were revised down too, with July now showing jobs lost rather than gained. A weaker economy makes another Fed rate rise less likely, and the market’s odds of an October hike fell from about 64% to roughly 20%. Bitcoin rose straight towards $87,000 on the news.
It then faded again for the same reason we saw last week. The yield on a 30-year US government bond is near 5.67%, close to its highest level in 24 years, and the dollar hit an 18-month high. Those two numbers are pulling against Bitcoin in the short term, even as the longer-term debt picture we wrote about a fortnight ago keeps getting worse. The Fed’s minutes from its September meeting, out this week, are the next thing traders will be watching.
Institutional Buying Is Thinning Out
Bitcoin ETFs took in money for a third week running, but only $241 million, down about 90% on the previous week’s $2.39 billion. Look closer and it gets thinner still. BlackRock’s IBIT took in $450 million on its own, while almost every other major fund saw money leave. Without BlackRock, the ETFs as a group lost around $209 million. A winning streak that depends entirely on one fund is less reassuring than it looks.
Metaplanet’s Very Expensive Round Trip
Metaplanet, the second-largest public company holding Bitcoin, sold 10,000 Bitcoin at an average of about $78,900, then bought back 11,000 at an average of about $86,200. The net result was 1,000 more Bitcoin, at a cost of roughly $160 million more than if it had simply held on. The stated reason was to park money in cash for a while to reassure lenders it could access funds quickly. Its average purchase price across all its holdings is now around $98,450, well above the current Bitcoin price.
Strategy, by comparison, bought only 334 Bitcoin this week and spent far more buying back its own preferred shares. Strive added 2,000. The corporate treasury model is increasingly being run with one eye on lenders and credit ratings, and less on simply accumulating Bitcoin.
Quick Hits
The Bitget attackers were inside for almost four weeks. Last week we covered the $387.5 million Bitget hack. New details show the attackers first got hold of database credentials on August 31, then waited until September 25 to send forged withdrawal instructions that slipped past Bitget’s controls. No private key was ever stolen. They simply took over the system that approves withdrawals. September is now the worst month for crypto theft in 2026, with over $766 million stolen across 55 major incidents. If your coins sit in your own wallet, none of that machinery can be turned against you.
Sanctions evaders prefer stablecoins, not Bitcoin. The US Treasury took its largest ever crypto sanctions action, against a Russian network called A7. Its ruble-backed stablecoin moved at least $179 billion in around 16 months, used for everything from sanctioned oil sales to weapons purchases. It is a useful official answer to the old claim that Bitcoin is the criminal’s currency of choice. The money moved on a ruble-pegged token running on other blockchains.
A big bank raises its target. Citigroup raised its 12-month Bitcoin price target from $82,000 to $113,000, expecting around $5 billion of further ETF inflows.
The Fed minutes and any move above $87,570 are the two things to watch next. I will cover both next week. Make sure you are subscribed.
And Finally…
The Butcher With Better Timing Than Metaplanet
In Indiana, a local Bitcoin group has mapped around 200 businesses that accept Bitcoin. One of them, an Indianapolis butcher called Old Major Market, used to convert every payment straight into dollars. This year it switched to keeping all of the Bitcoin it receives. That means a butcher is now quietly running a Bitcoin treasury strategy, and on the numbers above, with a better average purchase price than Metaplanet.
The 4chan Prophet Says the Bear Market Is Over
Back in December 2023, an anonymous 4chan user used nothing but day-counting numerology to predict Bitcoin would peak on October 6, 2025. It did, at $126,198. Running the same arithmetic forward puts the bottom on October 5, 2026, which means that, according to the Internet’s most unlikely market analyst, the bear market ended this week. Choose your own adventure.
The Robots Are Reading the Fed
Fed Governor Christopher Waller gave a speech with the title “The Data Version of Godzilla versus Kong.” Along the way he revealed that half of all visits to the Fed’s public economic data website now come from AI agents rather than people. The economy is increasingly being analysed by machines, for machines.
Quick Questions
Q: Does the FinCEN decision mean I can use my own wallet without any reporting at all?
A: It means the specific rule that would have targeted transfers to and from self-custody wallets is gone. Exchanges still have to follow normal anti-money-laundering rules when you deposit or withdraw, and you still owe tax on any gains.
Q: Why does $87,570 matter so much?
A: It is where Bitcoin started 2026. Until it closes above that level, Bitcoin is still down for the year, so traders treat it as a key line between a recovery and a genuinely new move higher.
Q: Is it worrying that one ETF is doing all the buying?
A: It is worth watching. Demand concentrated in a single fund is less broad, and therefore less dependable, than demand spread across many. It does not mean the buying is fake, just that it is narrower than the headline number suggests.
This article is for information only. (Not financial advice.)