Bitcoin Tops $86K as Citi Lifts Target, SEC Eyes Custody Rules, Illinois Delays Crypto Tax

Bitcoin climbed to $86,459 on Friday morning, posting its strongest Q4 open in years, as a confluence of institutional optimism, short liquidations, and easing Treasury yield pressures sent the market higher ahead of the September jobs report. The rally extended a three-week recovery that has seen BTC rise more than 10% in October alone, with Ethereum also breaking out of the $2,600 range it had held since late September.

Citigroup added fuel to the move, raising its 12-month Bitcoin price target to $113,000 from $82,000, an increase of roughly 38%, while simultaneously lifting its Ethereum target to $3,028 from $2,240. The bank pointed to stronger crypto market activity, a more supportive macroeconomic backdrop, and a resumption of ETF inflows as the primary drivers behind the upgraded outlook, according to a note to investors cited by Reuters.

SEC Proposes Crypto Custody Framework for Advisers and Funds

On the regulatory front, the U.S. Securities and Exchange Commission proposed a new custody framework on Thursday that would allow investment advisers and regulated funds to self-custody crypto assets under certain circumstances and permit state trust companies to act as custodians. The proposal aims to provide a compliant pathway for holding digital assets under rules that largely predate the internet, addressing a critical gap for institutional investors where qualified custodial infrastructure for some crypto assets does not yet exist. The announcement came after the Clarity Act, a sweeping crypto market structure bill, failed to pass the Senate in September 2026.

Meanwhile, Illinois agreed to a six-month delay of its 0.2% crypto tax, pushing the effective date to July 1, pending court approval of the deal. Both the state and the crypto industry agreed to pause the levy so both sides can focus resources on an ongoing legal dispute over the tax's validity. CoinDesk reported that Bitcoin's open interest simultaneously jumped $2.3 billion on Friday as traders paid higher funding rates to secure bullish positions, a signal that renewed demand for upside exposure is building even as broader macroeconomic uncertainty lingers ahead of monthly jobs data.