Bitcoin’s rally toward $70,000 over the past 24 hours has resurfaced a familiar debate in crypto markets: whether Wall Street firms operating within the spot exchange-traded fund (ETF) ecosystem have too much influence over price discovery.
The latest target is Jane Street, a large ETF intermediary and quantitative trading firm that is the subject of a new lawsuit related 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 U.S. market open suddenly disappeared after the lawsuit became public.
The theory caught on quickly because it combines two ideas that already resonate: distrust of big trading companies and anxiety about how much of the Bitcoin market is currently run by traditional finance.
However, evidence of a coordinated Bitcoin suppression program remains thin.
What this episode illustrates more clearly is that the structure of spot Bitcoin ETFs makes it difficult for many investors to discern where genuine spot demand ends and market making, hedging, and arbitrage begin.
In that sense, the Jane Street controversy extends beyond a single company. It focuses on how Bitcoin’s new institutional infrastructure will shape price discovery and determine whether the market becomes more efficient or increasingly opaque.
How Jane Street’s Bitcoin Rumors Started
The rumor took shape after Bitcoin skyrocketed for two sessions, with X posters claiming that the so-called 10am sell program had disappeared.
In particular, Negentropic, an X-account run by Glassnode co-founders Jan Happel and Yann Allemann, helped popularize the theory by claiming:
“The Jane Street lawsuit is made public and the 10am BTC clash miraculously disappears.”
The claim attracted attention because Jane Street is not an unknown market participant. The company is one of the world’s largest trading companies and a well-known player in the Bitcoin ETF market, serving as an authorized participant of IBIT.
In practice, this puts the ETF’s share price closer to the mechanism that matches the value of its underlying holdings.
Meanwhile, the legal battle against the company intensified.
The ultimate administrator of Terraform Labs has filed a lawsuit in Manhattan, accusing Jane Street and others of using material nonpublic information related to Terraform’s liquidity movements during the May 2022 TerraUSD crash.
The complaint alleges that Terraform withdrew $150 million in TerraUSD liquidity from three Curve pools, and approximately $85 million was withdrawn from wallets linked to Jane Street within minutes before the moves were made public.
Jane Street has denied any wrongdoing and described the incident as a desperate attempt to shift responsibility for losses caused by Terraform’s own actions.
This lawsuit does not prove anything about current Bitcoin transactions.
But this helps explain why traders were so quick to associate the Jane Street name with observable market patterns.
Trust is often fragile in cryptocurrencies, and companies accused in one market tend to be suspects in the next.
Industry insiders refute rumors
With this in mind, Bitcoin traders have argued that the high-flying cryptocurrency has been hurt for months by mechanical selling around the U.S. spot open, liquidating longs and creating air pockets in the thin order book.
If Jane Street’s sales stopped when it came under new legal scrutiny, it would likely remain dependent on the market.
Additionally, the company’s early association with Sam Bankman Freed, the disgraced founder of bankrupt FTX, also helped cast the company in a bad light. Bachman Freed worked at a trading company before founding the collapsed exchange.
The story is emotionally satisfying. It’s also much easier to argue than to prove.
James Check, an on-chain analyst at Checkonchain, refuted this thesis outright, writing that Jane Street was not suppressing Bitcoin and that long-term holders who were selling spot to the market did much more to explain the price fluctuations.
Julio Moreno, head of research at CryptoQuant, made a similar point, arguing that the theory ignores a more obvious factor: the collapse in Bitcoin spot demand after early October 2025.
He also added that the structure attributed to Jane Street is similar to the delta-neutral positioning employed by many trading companies.
This backlash is important because it is directed at the rumor’s central weakness. Bitcoin was already well into 2026 under pressure from broader macro repricing.
Institutional investors reduced their exposure to Bitcoin ETFs for the fifth straight week, with total Spot Bitcoin ETF outflows reaching approximately $4.5 billion, according to data from SoSo Value.
At the same time, Glassnode data showed that repeated bouts of market stress earlier this month moved the BTC options market into a more volatile setup.
According to the company, the total historical gamma exposure (GEX) map shows negative gamma expanding below current prices, while the “wall” of positive gamma above the spot is fading.
In layman’s terms, this means that option positioning, which often acts like a shock absorber, wears off, leaving much of the market sitting in a zone where hedging flows can stop moderating declines and start supplying.
This dynamic is important because when price is in the short gamma pocket, dealer delta hedges tend to follow the movement rather than selling on weakness and buying on strength.
This allows the market to move faster and further with relatively small catalysts, increasing intraday volatility and increasing the risk of BTC cascading through major levels until it hits the next thick “gamma wall”, where it weakens and reverts to hedge mode.
In other words, traders were already operating in an environment where their intentions could be seen everywhere. When liquidity is weak and leverage is high, almost all sharp movements appear to be corrected.
ETF pipes are harder to read than they look
The deeper issue raised by the Jane Street argument is structural rather than personal.
As ProCap Financial Chief Information Officer Jeff Park has argued, the real question is not whether a company is “suppressing” Bitcoin on its own, but whether the structure of the ETF market gives authorized participants a degree of discretion that is not visible to the public.
This is important because investors still tend to read ETF disclosures as if they were clean directional signals. it’s not. Although Form 13F can represent large long ETF positions, SEC guidance makes clear that short positions are not included and short options positions are not netted with longs.
In reality, the market may check stocks without making sure that futures, options, or other hedges are incorporated.
That opacity is further reinforced by how trust is built. According to BlackRock’s report to IBIT, the trust can process creation and redemption through authorized participants and can also conduct transactions with designated Bitcoin counterparties.
At the time of this filing, these 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 list of authorized participants has expanded to include institutions such as Jane Street, JPMorgan, Citadel Securities, Citigroup, Goldman Sachs, UBS, and Macquarie, expanding the number of companies that can access the ETF’s creation and redemption mechanisms.
Park points out that this structure can distort outsiders’ interpretations of ETF flows.
The old cash model required funds to purchase spot Bitcoin to create works. However, after the SEC approved the in-kind creation and redemption of virtual currency ETPs in July 2025, authorized participants gained more flexibility in sourcing and offering the underlying assets.
The SEC said the changes will reduce the cost of the product and increase efficiency. However, this also means that AP exposure can be managed through a wider range of products and counterparties, making it difficult to know when an ETF’s activity reflects full spot demand and when it reflects inventory management, basis trading, and hedge construction.
None of that is evidence of abuse, and Mr. Park’s claims do not rely on proof of abuse by Jane Street or any other company. More pointedly, the era of Bitcoin ETFs introduces a black box between public location data and the underlying price discovery process.
The beginning of a trade may look like normal market making. In the end it may look like normal market making.
It is the in-between that is difficult to observe. Whether the hedge is spot, futures, swaps, or a combination of all three, and whether natural arbitrage mechanisms are actually sending real spot demand into Bitcoin.
That’s why the Jane Street rumors resonate. This is less an indictment on one participant than an indication of how little visibility the market has into the plumbing itself.
Why the US Open feels like a sell zone
Even without intentional manipulation, the US Open is a window of real volatility, so the 10am theory seems convincing.
This period will focus on reallocation between assets, equity-related risk adjustments, and hedging derivatives.
In markets where ETF intermediaries can use futures and other instruments to hedge their inventory, futures can help drive up the spot price rather than simply following it.
If the order book is thin, those moves can seem bigger and more sinister than they really are. Bloomberg reported earlier this month that the depth of the Bitcoin market remains more than 35% below October levels, highlighting how fragile liquidity has become.
Macro analyst Alex Krueger, on the other hand, opined that the available data did not support claims of systematic dumping on a daily basis at 10am.
He wrote that since Jan. 1, IBIT’s cumulative return in the 10 a.m. to 10:30 a.m. eastern window was positive 0.9%, while the 10 a.m. to 10:15 a.m. window was down 1%.
In his view, it was noise, not evidence of a repeatable suppression program.
More importantly, the performance pattern for both windows closely tracks the Nasdaq, suggesting broader risk asset repricing rather than a Bitcoin-specific operation, he said.
That interpretation fits into a broader market context than a viral story.
Given that Bitcoin is increasingly traded as a macro-risk asset through an ETF wrapper, no one would be surprised that stress at the US Open, especially in a thin market, could result in repeated declines in the same intraday window.
Scarcity is evident on the chain. Not price discovery
The supply of Bitcoin is fixed by the protocol. There’s nothing the ETF market structure does to change that. What has changed is the path through which the proportion of demand and skepticism grows.
The Jane Street discussion reveals the gap between these two realities. On-chain scarcity is transparent. The institutional system built on it is not.
Investors can see an ETF’s outstanding shares and disclosed holdings, but they cannot see all hedges, all internal net exposures, or all cross-market positions that may be behind the market maker’s books.
This gap not only creates room for misunderstanding, but also for mistrust.
It also doesn’t help that Jane Street has come under scrutiny in other markets.
In July 2025, India’s securities regulator issued an interim order in a case alleging index manipulation by a Jane Street company, and Reuters subsequently reported that SEBI had barred the company from India’s securities markets while the matter was ongoing. Jane Street also denied any wrongdoing there.
The Indian incident is separate from Bitcoin, but it helps explain why crypto traders were bracing for the worst when Jane Street’s name hit the headlines again.
Still, the available facts do not prove that Jane Street carried out a deliberate Bitcoin suppression program.
They establish something else. The post-ETF Bitcoin market is more accessible, more institutionally integrated, and harder to interpret for retail investors.
(Tag Translation) Bitcoin
