Bitcoin’s rally towards $70,000 revives Jane Street debate
Bitcoin’s rebound toward $70,000 over the last 24 hours has revived a familiar debate in crypto markets: whether Wall Street firms operating within the spot exchange-traded fund (ETF) ecosystem have gained too much influence over price discovery.
The latest target is Jane Street, the quantitative trading firm that is both a major ETF intermediary and the subject of a fresh lawsuit tied to the 2022 collapse of Terraform Labs.
On social media platforms, traders linked Bitcoin’s recent rally to claims that an alleged pattern of sharp intraday selling around the US market open had suddenly faded after the lawsuit became public.
The theory spread quickly because it combines two ideas that already resonate: distrust of large trading firms and unease over how much of Bitcoin’s market now runs through traditional finance.
However, the evidence for a coordinated Bitcoin suppression program remains thin.
What the episode does show more clearly is that the structure of spot Bitcoin ETFs has made it harder for many investors to tell where genuine spot demand ends and where market-making, hedging, and arbitrage begin.
In that sense, the Jane Street controversy extends beyond a single firm. It centers on how Bitcoin’s new institutional infrastructure is shaping price discovery, determining whether markets are becoming more efficient or increasingly opaque.
How Jane Street’s Bitcoin rumor began
The rumor took shape after Bitcoin rallied sharply over two sessions, prompting posters on X to argue that a so-called 10 A.M. sell program had disappeared.
Notably, Negentropic, the X account run by Glassnode co-founders Jan Happel and Yann Allemann, helped put the theory into circulation by claiming:
“Jane street Lawsuit gets made public, and miraculously the 10am BTC slam disappears.”
That claim gained traction because Jane Street is not an obscure market player. It is one of the largest trading firms in the world and a renowned player in the Bitcoin ETF market, serving as an authorized participant for IBIT.
In practice, this allows it to sit close to the mechanism that helps keep ETF share prices aligned with the value of the underlying holdings.
Meanwhile, the legal battles against the firm further stoked the raging fire.
The wind-down administrator for Terraform Labs filed a lawsuit in Manhattan, accusing Jane Street and others of using material nonpublic information tied to Terraform’s liquidity moves during the TerraUSD collapse in May 2022.
The complaint alleges that Terraform withdrew $150 million of TerraUSD liquidity from Curve’s 3pool and that a wallet linked to Jane Street withdrew about $85 million within minutes, before the move was publicly disclosed.
Jane Street has denied wrongdoing and described the case as a desperate attempt to shift blame for losses caused by Terraform’s own conduct.
That suit does not prove anything about present-day Bitcoin trading.
However, it helps explain why traders were quick to attach Jane Street’s name to an observable market pattern.
In crypto, trust is often fragile, and firms accused in one market episode tend to become suspects in the next one.
Industry stakeholders counter rumors
Considering this, Bitcoin traders argued that the top crypto had been hit for months by mechanical selling around the US cash equity open, liquidating longs and creating air pockets in thin order books.
If that selling stopped when Jane Street came under new legal scrutiny, then perhaps the firm had been leaning on the market all along.
Moreover, the firm’s early link to Sam Bankman-Fried, the disgraced founder of the bankrupt FTX, also helped paint it in a bad light. Bakman-Fried previously worked at the trading firm before founding the collapsed exchange.
That narrative is emotionally satisfying. It is also much easier to assert than to prove.
James Check, an on-chain analyst at Checkonchain, directly rejected the thesis, writing that Jane Street did not suppress Bitcoin and that long-term holders selling spot into the market had done far more to explain the price action.
CryptoQuant head of research Julio Moreno made a similar point, arguing that the theory ignored a more obvious driver, a collapse in Bitcoin spot demand since early October 2025.
He also added that the mechanics being ascribed to Jane Street were similar to the delta-neutral positioning many trading firms use.
That pushback matters because it goes to the central weakness in the rumor. Bitcoin had already entered 2026 under pressure from a broader macro repricing.
Data from SoSo Value shows that institutional investors had reduced their exposure to BTC ETFs over five straight weeks, and total spot Bitcoin ETF outflows reached roughly $4.5 billion.
At the same time, data from Glassnode showed that the repeated bout of market stress earlier this month had triggered a shift in BTC’s options market toward a more unstable setup.
According to the firm, a full-history gamma-exposure (GEX) map shows negative gamma expanding at and below the current price, while the positive-gamma “walls” above spot are thinning out.
In plain terms, this means that the options positioning that often acts like a shock absorber is fading, and more of the market is sitting in a zone where hedging flows can stop cushioning dips and start feeding them.
This dynamic is important because when price sits in a short-gamma pocket, dealers’ delta-hedging tends to chase the move rather than selling into weakness and buying into strength.
This result is a market that can move faster and farther on relatively small catalysts, with bigger intraday swings and a higher risk of cascading moves through key levels until BTC runs into the next thick “gamma wall” where hedging flips back into dampening mode.
In other words, traders were already operating in an environment primed to see intent everywhere. When liquidity is weak and leverage is high, almost any sharp move can look coordinated.
The ETF pipes are harder to read than they look
The more serious issue raised by the Jane Street debate is structural, not personal.
As Jeff Park, CIO at ProCap Financial, has argued, the real question is not whether one firm is uniquely “suppressing” Bitcoin, but whether the ETF market structure gives authorized participants a degree of discretion that the public cannot easily see.
That matters because investors still tend to read ETF disclosures as if they were clean directional signals. They are not. A Form 13F can show a large long ETF position, but SEC guidance is explicit that short positions are not included, and short options positions are not netted against longs.
In practice, the market may see inventory without seeing the futures, options, or other hedges wrapped around it.
That opacity is reinforced by the way the trust is built. BlackRock’s report for IBIT states that the trust can process creations and redemptions through authorized participants and also transact with designated Bitcoin trading counterparties.
As of that filing, those counterparties included JSCT, LLC, an affiliate of Jane Street Capital, and Virtu Financial Singapore, an affiliate of Virtu Americas.
The filing also shows that the authorized participant roster had expanded to include institutions such as Jane Street, JPMorgan, Citadel Securities, Citigroup, Goldman Sachs, UBS, Macquarie, and others, broadening the number of firms with access to the ETF creation and redemption machinery.
Park’s point is that this structure can distort outsiders’ interpretation of ETF flows.
Under the older cash model, creations required the fund to buy spot Bitcoin. But after the SEC approved in-kind creations and redemptions for crypto ETPs in July 2025, authorized participants gained greater flexibility in sourcing and delivering the underlying asset.
The SEC said the change would make the products less costly and more efficient. It also means, however, that an AP’s exposure can be managed through a wider set of instruments and counterparties, making it harder to know when ETF activity reflects outright spot demand and when it reflects inventory management, basis trading, or hedge construction.
None of that is proof of abuse, and Park’s argument does not depend on proving abuse by Jane Street or any other firm. The sharper point is that Bitcoin’s ETF era has introduced a black box between public positioning data and the underlying price-discovery process.
The beginning of the trade can look like ordinary market-making. The end can look like ordinary market-making.
What remains hard to observe is the middle: whether the hedge is in spot, futures, swaps, or some combination of all three, and whether the natural arbitrage mechanism is actually transmitting real spot demand into Bitcoin.
That is why the Jane Street rumor resonates. It is less an accusation against one participant than a sign of how little visibility the market has into the plumbing itself.
Why the US open feels like a sell zone
The 10 A.M. theory sounds compelling because the US open is a real volatility window even without deliberate manipulation.
That period concentrates on cross-asset repositioning, equity-related risk adjustments, and derivatives hedging.
In a market where ETF intermediaries can hedge inventory with futures or other instruments, futures can help pull spot prices around rather than simply follow them.
When order books are thin, those moves can look larger and more sinister than they are. Bloomberg reported earlier this month that Bitcoin market depth remained more than 35% below October levels, underscoring how fragile liquidity has become.
Meanwhile, Alex Kruger, a macro analyst, has opined that the available data does not support the claim of a systematic daily dump at 10 A.M.
He wrote that since Jan. 1, IBIT’s cumulative return in the 10:00 to 10:30 A.M. Eastern window was positive 0.9%, while the 10:00 to 10:15 A.M. window was down 1%.
In his view, that was noise and not evidence of a repeatable suppression program.
More importantly, he said, the performance pattern in both windows closely tracked the Nasdaq, suggesting broad risk-asset repricing rather than a Bitcoin-specific operation.
That interpretation fits the wider market backdrop better than the viral story does.
If Bitcoin is increasingly traded as a macro risk asset through an ETF wrapper, then it should not surprise anyone that stress at the US open, especially in a thin market, can create repeated weakness in the same intraday window.
Scarcity is clear on-chain. Price discovery is not
Bitcoin’s supply remains fixed by protocol. Nothing about the ETF market structure changes that. What has changed is the route through which a growing share of demand, and skepticism, now travels.
The Jane Street debate exposes the gap between those two realities. On-chain scarcity is transparent. The institutional system built on top of it is not.
Investors can see ETF shares outstanding and pieces of disclosed holdings, but they cannot see every hedge, every internal net exposure, or every cross-market position that may sit behind a market maker’s book.
That gap creates room for misunderstanding, but also for distrust.
It does not help that Jane Street has faced scrutiny in other markets.
In July 2025, India’s securities regulator issued an interim order in a case alleging index manipulation by Jane Street entities, and Reuters later reported that SEBI barred the firm from the Indian securities market while the matter proceeded. Jane Street denied wrongdoing there as well.
While the India case is separate from Bitcoin, it helps explain why crypto traders were ready to believe the worst when Jane Street’s name returned to the headlines.
Still, the available facts do not establish that Jane Street ran a deliberate Bitcoin suppression program.
They do establish something else. Bitcoin’s post-ETF market has become easier to access, more institutionally integrated, and harder for ordinary investors to interpret.
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