The crypto landscape shifted this week with three headline-making developments. Blast announced the termination of its Ethereum layer-2 network, U.S. spot Bitcoin exchange-traded funds recorded a fresh $102.7 million inflow on the first trading day of October, and the SEC unveiled a proposal to make crypto custody easier for investment advisers.
Blast’s Ethereum L2 to wind down
After roughly a year of operation, Blast concluded that the cost of running its Ethereum layer-2 chain exceeded the revenue it could generate. The platform stated there is no “credible path” to economic sustainability and urged users to shift their holdings back to the Ethereum mainnet. To facilitate the transition, withdrawal delays have been trimmed to a 24-hour window, although withdrawals are temporarily paused while the protocol unwinds positions held through Lido. This unwinding is expected to last about a week.
Key dates and user actions
Participants have until Oct. 26 to pull funds through Blast’s native interface. After that deadline, assets will remain accessible, but owners must interact directly with the network’s bridge contracts on Ethereum to retrieve them. The shutdown follows a rapid rise and fall: founded by Blur co-founder Tieshun “Pacman” Roquerre in 2023, Blast attracted more than $2 billion in capital before its mainnet launch in February 2024. Yet its DeFi total value locked plummeted over 98 % from a June 2024 peak of roughly $2.2 billion, mirroring the broader slowdown in the NFT market.
Bitcoin ETFs rebound with $102.7 million net inflow
U.S. spot Bitcoin ETFs switched back to positive net flows on the first trading day of October, adding $102.7 million after a $148.7 million outflow the previous day, according to SoSoValue data. The influx lifted the combined net assets of the products to $109.3 billion, while cumulative net inflows across all spot Bitcoin ETFs now stand at $57.6 billion.
Quarterly context and price action
The October start follows a robust third-quarter performance, during which the cohort attracted $6.34 billion in net new capital, including $2.65 billion in September alone. Bitcoin itself has risen 42.7 % over the quarter, trading around $85,900 at the time of writing—a 2.1 % gain in the prior 24 hours. The Crypto Fear & Greed Index, while slipping from 74 to 72, remains in the “Greed” zone, underscoring persistent investor optimism.
SEC proposes softer custody rules for advisers
The U.S. securities regulator released a proposal aimed at easing the custodial burden that many investment advisers face when dealing with digital assets. Under the draft, advisers could directly hold a client’s crypto when no eligible custodian is available, subject to specific conditions. The rule would also recognize state-level trust companies as qualified crypto custodians.
Regulatory rationale and industry response
SEC Chair Paul Atkins emphasized that “the crypto asset market has grown from a niche curiosity into a multi-trillion-dollar asset class to which investors actively seek exposure. Unfortunately, our rules and regulations have not kept pace.” The proposal targets the practical hurdle where advisers struggle to locate custodians for particular tokens, limiting the products they can offer. The Digital Chamber previously highlighted this gap, noting in a May 2025 filing that some advisers either declined token allocations or asked portfolio companies to retain the assets until a custodian became available.
Collectively, the three events illustrate a sector at a crossroads: bold infrastructure bets like Blast confront harsh economics, institutional demand for Bitcoin exposure remains strong, and regulators are beginning to adjust frameworks that could unlock broader participation.
