Bitcoin Has Its Biggest Rally Since Early 2024 & Citi Joins the Custody Race

What a week to be a Bitcoiner. Bitcoin ran from below $63,000 on Monday to nearly $78,000 by Friday morning, on track for its best week since early 2024. Also, one of the world's largest banks confirmed it expects to custody Bitcoin for clients this year. 

TL;DR

• Bitcoin rallied roughly 23% this week after the US Treasury doubled the per-operation cap on its long-end bond buybacks and the SEC proposed new crypto-offering rules.

• Citi, with $34.5 trillion in assets under custody and administration, expects to launch Bitcoin custody later this year on its new Custody+ platform.

• The US Treasury published its proposed rule for the GENIUS Act's core licensing regime, defining who can issue and sell stablecoins in the US. Comments are due October 19.

The Rally: A Short Market Meets a Liquidity Headline 🚀

On Monday, Bitcoin opened near $62,800, and sentiment wasn't great. By Tuesday, VanEck counted 8 of 12 capitulation signals flashing.

Then, three catalysts hit in 48 hours.

On Tuesday afternoon, the SEC proposed "Regulation Crypto Assets," a framework that would allow issuers to raise up to $5 million over four years or $75 million annually for crypto offerings tied to investment contracts. Wednesday morning, the US Treasury announced that the maximum purchase amount per operation in the 10- to 20-year and 20- to 30-year nominal-coupon sectors will rise from $2 billion to at least $4 billion, effective September 9. Wednesday afternoon, industry executives met with President Trump at the White House.

Bitcoin touched $69,000 on Wednesday for the first time in two months. By Friday morning, it was trading near $77,700, up roughly 23% for the week and on track for one of its strongest weekly performances in years.

Along the way, CoinGlass tracked about $2.7 billion in crypto short liquidations, including roughly $1.7 billion in Bitcoin shorts.

Citi Will Custody Bitcoin 👀

There’s also news from Wall Street. Citi announced on Tuesday that it expects to go live with Bitcoin custody later this year under its new Custody+ platform, giving clients access to traditional and crypto custody within the same framework.

Citi holds $34.5 trillion in assets under custody and administration, which makes it one of the four largest custodians in the world.

Custody is one of the least glamorous but most important pieces of institutional adoption. For many institutions, approved custody is a prerequisite, and the allocation conversation doesn't start until the custodian question is answered.

And look at the field now. BNY is in, the OCC conditionally approved Morgan Stanley Digital Trust in June, and Citi now expects to launch custody later this year. The same institutions that spent a decade telling clients Bitcoin was too risky to hold are now competing to hold it. A decade of no turned into a race for market share.

Stablecoin Rules Get Their Deadlines 📋

On Monday, the US Treasury published its proposed rule implementing section 3 of the GENIUS Act. That’s the part that decides who is actually allowed to issue a payment stablecoin in America.

There are two important dates that anchor the framework. The Act takes effect no later than January 18, 2027 — or earlier, 120 days after the primary federal regulators issue their final implementing regulations — and from that point, issuing a payment stablecoin in the United States generally requires a federal or state license.

From July 18, 2028, digital asset service providers generally can’t offer or sell payment stablecoins to US persons unless a licensed issuer stands behind them.

That means that the proposal spells out what "issuing in the United States" and "offering or selling to a person in the United States" actually mean, and those two definitions determine which issuers need a license and which offshore structures are offshore in name only. The rule hit the Federal Register on Tuesday, and comments are due October 19.

This is regulatory clarity doing exactly what it's supposed to do. Clear rules of the road are how the hundreds-of-billions-dollar stablecoin market becomes core financial infrastructure. The builders who engage with this comment window will shape the perimeter everyone else operates inside.

Elsewhere in Bitcoin 🌍

• Metaplanet agreed to contribute 2,100 BTC at closing to launch Superplanet, a US Bitcoin treasury company. The deal is expected to close in Q4, pending shareholder approval.

• Chinese insurtech Zhibao Technology completed a $154.7 million PIPE paid by investors in Bitcoin, landing 2,380 BTC on its balance sheet.

• The comment window closed on the SEC's proposal to rescind Rule 611 of Reg NMS, with a16z, Ondo, and the Blockchain Association arguing the trade-through rule complicates onchain trading and atomic settlement of tokenized equities.

Weeks like this one are why conviction matters. The people who capitulated below $63,000 on Monday sold to the people who understood what a positioning squeeze looks like. 

Stay humble, stack sats, and let Bitcoin do the rest.

Your fellow stacker in sats,

Patrick Lowry

PS: If you want to see how the value of goods and services changes when priced in Bitcoin, check out the Samara Bitcoin CPI. It might give you a new perspective on holding Bitcoin on your company's balance sheet or just as an individual.

Disclaimer: The opinions expressed in this newsletter are solely those of the author and do not necessarily represent the views of any associated company. This newsletter is for educational and informational purposes only and should not be construed as investment, financial, or any other professional advice. Nothing here is a solicitation, offer, or recommendation to buy or sell any asset or to use any service. Investing in cryptocurrencies is highly speculative and carries a significant risk of substantial financial loss, so you must conduct your own thorough research and consult with independent professional advisors before making any decisions.