Jane Street Didn't Crash Bitcoin

Crypto Twitter found its villain. Jane Street — the secretive quantitative trading firm that employed Sam Bankman-Fried — is being accused of systematically suppressing Bitcoin prices through coordinated daily dumps at 10 AM ET.

The theory goes like this: as an authorized participant for BlackRock's IBIT, Jane Street was allegedly dumping spot Bitcoin every morning at market open, pushing prices down, then scooping up ETF shares at a discount. When the Terraform Labs insider trading lawsuit dropped this week and the 10 AM dumps mysteriously stopped, CT declared victory.

There's just one problem: the data doesn't back it up.

The Conspiracy

The accusations have gone viral across CT. Influential accounts like Whale Factor and Glassnode's Negentropic have documented what they call the "10-Point Strike" — Bitcoin allegedly dropping 2-3% within minutes of the U.S. cash open almost every trading day since November.

The narrative is compelling because Jane Street's reputation precedes it. India's SEBI banned the firm last year, freezing $566 million in alleged illegal gains from a "morning pump, afternoon dump" scheme manipulating the Bank Nifty index. This week, Terraform Labs' bankruptcy administrator sued Jane Street for insider trading, alleging the firm used non-public information to avoid over $200 million in losses before Terra's collapse.

Add the SBF connection — Jane Street employed both Sam Bankman-Fried and Caroline Ellison before they went on to commit fraud at FTX — and you've got the perfect villain.

The Reality Check

But when crypto economist Alex Kruger actually pulled the data, the conspiracy theory fell apart. Since January 1, IBIT's cumulative return in the 10:00-10:30 ET window is +0.9%. The first 15 minutes show -1%. That's noise, not manipulation.

"Everyone says bitcoin dumps at 10AM every day," Kruger noted. "I pulled the data, and it's not true."

Dragonfly Capital partner Rob Hadick, a Goldman Sachs veteran, was blunt: "The argument makes zero sense and completely misunderstands how derivatives and perps/futures work as well as what an AP does for these ETFs."

Here's what authorized participants actually do: they create and redeem ETF shares to keep the fund's price aligned with its underlying assets. They hedge exposure using spot Bitcoin, futures, and other instruments. These trades cluster around high-liquidity windows — including market open. It's not manipulation; it's market-making.

The Real Story

Bitcoin has fallen over 40% since October. Unlike previous downturns, there's been no obvious catalyst — no exchange collapse, no regulatory crackdown, no macro shock. The market has been drifting lower in a slow, painful bleed.

When you're losing money and can't explain why, you look for a villain.

Jane Street makes a convenient scapegoat. They're secretive, they're profitable ($20.5 billion in net trading revenue last year), and they've got baggage. But "people who don't understand markets want a boogeyman to blame for why they haven't made more money," as Hadick put it.

The real issue isn't Jane Street. It's that crypto is in a bear market with no fresh capital inflows and no clear catalysts. The $8.72 billion in options expiring today — with Bitcoin trading well below max pain at $75,000 — reflects a market that's structurally weak, not artificially suppressed.

The Bottom Line

CT wants a conspiracy because conspiracies imply control. If someone's manipulating the market down, the market can be manipulated back up. If prices are being artificially suppressed, fair value is somewhere higher.

But sometimes markets just go down. Sometimes there's no villain. Sometimes the boring explanation — ETF flows, hedging dynamics, and weak demand — is the real one.

Jane Street didn't crash Bitcoin. The market did that on its own.