The claim that Wall Street is warming to Bitcoin got a fresh data point this week from Coinbase's own C-suite. Shan Aggarwal, Coinbase's first-ever Chief Business Officer, said in a Bitcoin Magazine interview published October 5 that large banks are increasing their Bitcoin exposure. He named no banks and put no number on the shift, but he tied it to a fast-moving regulatory backdrop: the SEC's proposed custody rules, released October 1, that could let registered investment advisers hold Bitcoin directly for clients instead of routing them through ETFs.
Aggarwal's read is that the rule change would widen Bitcoin's addressable market rather than just shuffle flows between wrappers. He framed it as "expanding the pie for Bitcoin access," with Coinbase's custody arm positioned as the infrastructure underneath — the exchange is the named custodian behind most of the US-listed spot Bitcoin ETFs. A second Coinbase voice made the same case from a different angle: fellow executive Ryan VanGrack said in a separate October 5 interview that a recent CFTC approval "opens many doors" for Bitcoin, arguing that spot ETFs and direct ownership can grow side by side instead of competing for the same dollars.
The price backdrop cooperates. Bitcoin changed hands at $86,158 on Tuesday, up roughly 35% from three months ago. That 34.66% 90-day climb has cut the drawdown from last year's October peak to about 22%.
Why it matters
The adviser channel is the prize here. The US has 16,544 SEC-registered advisers serving 73.7 million clients with $176.8 trillion in regulatory assets under management, per the Investment Adviser Association's 2026 industry snapshot. Almost none of that money can touch crypto directly today: the old custody rules made it legally hazardous for advisers to hold client crypto, since the firms that actually know how to secure digital assets — state-chartered trust companies like Coinbase Custody Trust Company, Gemini Trust, Paxos and BitGo Trust — spent years in a gray zone over whether they counted as qualified custodians at all.
The SEC's October 1 proposal, a roughly 760-page release titled "Adviser and Regulated Fund Custody Rules; Crypto Custody Rules," would fix exactly that. State trust companies would gain explicit qualified-custodian status under the rules, and advisers would get a narrow self-custody fallback for assets no qualified custodian can hold. In crude scenario math, even a 0.1% allocation from the adviser channel works out to $176.8 billion of potential demand — more than double the entire US spot Bitcoin ETF complex. That is arithmetic, not a forecast, and the proposal still has to survive rulemaking before advisers can act. But it explains why Aggarwal talks about the pie expanding rather than slices being re-cut, and why regulated-access stories keep stacking up — from Evernorth's Nasdaq debut as a listed XRP treasury vehicle to our Coinbase exchange hub, where the custody angle is now the central institutional story.
| Date | Development | Why it matters |
|---|---|---|
| Oct 1 | SEC releases crypto custody proposal | ~760-page release; trust firms like Coinbase Custody gain qualified-custodian status |
| Oct 5 | Coinbase CBO interview (Bitcoin Magazine) | Aggarwal: big banks are increasing BTC exposure |
| Oct 5 | Coinbase on CFTC approval | VanGrack: approval "opens many doors"; ETFs and direct ownership grow together |
| Sep 28 | Citi + Coinbase joint statement | Stablecoin infrastructure for business payments |
What to watch
- Whether the SEC proposal survives the comment period in its current shape — the trust-company provisions and the self-custody fallback are the parts custody providers care about most.
- Whether any of the unnamed banks disclose Bitcoin allocations in fourth-quarter filings. Aggarwal's claim stays anecdotal until a balance sheet shows up.
- The Citi–Coinbase stablecoin push: the two firms said in a joint statement on September 28 that they are building stablecoin infrastructure for businesses, starting with merchant payments. Aggarwal calls stablecoin payments a "trillion-dollar opportunity."
- Coinbase's own derivatives build-out — the CFTC-cleared, fully collateralized clearinghouse for futures and options is the derivatives-side counterpart to the custody story.
MarketRadar take
This is a plumbing story, not a price story — and that is precisely why it matters more than the 34% three-month rally. Regulated access has been Bitcoin's binding constraint since the ETF launch; the October 1 custody proposal attacks the single largest pool of managed money that still cannot touch the asset directly. If the rule survives in something close to its current form, Coinbase is the most direct infrastructure beneficiary: it already custodies most of the ETF complex and operates one of the named trust companies. The risk to the thesis is timing — proposals are not rules, and advisers cannot act until rulemaking concludes. Directionally, though, this week's evidence all points one way: the institutions are no longer debating whether to build crypto access, but how fast.
