Did Bitcoin plummet at 10 o'clock due to Jane Street selling off? Data points to a different direction.

The real issue isn’t Jane Street, but the black box of price discovery in the ETF era.

Author: CryptoSlate / Oluwapelumi Adejumo

Translation: Deep潮 TechFlow

Deep潮 Guide: Bitcoin recently rebounded to $70,000, and a conspiracy theory linking Jane Street to “pre-market sell pressure” in U.S. stocks has gone viral in the crypto community. This article dissects this claim from three angles: on-chain data, ETF structure, and options positions. The conclusion is: the real problem isn’t Jane Street, but the black box of price discovery in the ETF era—opacity in institutional hedging is making it increasingly difficult for ordinary investors to understand the market.

Full Text:

Bitcoin has surged close to $70,000 in the past 24 hours, reigniting a familiar debate: have Wall Street institutions operating within the spot ETF ecosystem gained too much influence over price discovery?

The target of this suspicion is Jane Street—a quantitative trading firm that is both a major ETF intermediary and a defendant in a new lawsuit related to the 2022 Terraform Labs collapse.

On social media, traders have linked Bitcoin’s recent rebound to a claim: that a pattern of intraday sharp drops near U.S. stock market open, which was publicly documented, has suddenly disappeared after the lawsuit was filed.

This theory spread quickly because it combined two already resonant ideas: distrust of large trading institutions and concern that Bitcoin markets are increasingly driven through traditional financial channels.

However, evidence supporting the “collaborative suppression of Bitcoin” theory remains weak.

This incident more clearly reveals that the structure of spot Bitcoin ETFs has made it harder for many investors to distinguish between genuine demand and market-making, hedging, and arbitrage activities.

In this sense, the controversy over Jane Street transcends accusations against a single entity. Its core is: how does Bitcoin’s new institutional infrastructure shape price discovery? Is the market becoming more efficient, or more opaque?

Origin of the Jane Street Bitcoin Rumors

The rumors emerged after Bitcoin experienced two consecutive days of sharp rebounds. Users on X (formerly Twitter) began claiming that the so-called “10 a.m. dump program” had vanished.

Notably, the account Negentropic, run by Glassnode co-founders Jan Happel and Yann Allemann, was a key driver of this narrative. They claimed: “Jane Street lawsuit was made public, and the 10 a.m. Bitcoin dump miracle disappeared.”

This claim gained traction quickly because Jane Street is not an unknown player. It is one of the largest trading firms globally and a well-known participant in the Bitcoin ETF market, serving as an authorized participant for IBIT (BlackRock’s spot Bitcoin ETF).

In practice, this makes it tightly integrated into the core mechanism that keeps ETF share prices aligned with the underlying holdings.

Meanwhile, the legal dispute involving the firm further fueled the controversy.

A liquidation manager for Terraform Labs filed a lawsuit in Manhattan, accusing Jane Street and other institutions of profiting from material non-public information during the TerraUSD collapse in May 2022.

The complaint states that Terraform withdrew $150 million in TerraUSD liquidity from Curve’s 3pool, and wallets associated with Jane Street withdrew about $85 million minutes before this information was made public.

Jane Street denies any misconduct, claiming the case is an attempt to shift blame for Terraform’s own actions.

This lawsuit does not prove anything about current Bitcoin trading.

But it explains why traders quickly linked Jane Street to an observable market pattern. In the crypto world, trust is often fragile, and institutions accused in one market event tend to become suspects in the next.

Industry Experts Counter the Rumors

Given this background, some Bitcoin traders believe that the recent months of mechanical sell-offs before and after U.S. stock market open, which liquidated long positions and created liquidity vacuums in thin order books, are linked to Jane Street.

If this selling disappeared after the firm faced new legal pressures, it might suggest that the company has been exerting market influence.

Additionally, the firm’s early association with FTX founder Sam Bankman-Fried casts a shadow over its reputation. Bankman-Fried worked at Jane Street before founding FTX.

While emotionally compelling, these narratives are easier to state than to prove.

On-chain analyst James Check of Checkonchain directly refuted this, stating that Jane Street has not suppressed Bitcoin; rather, long-term holders selling spot holdings better explains the price movements.

Julio Moreno, head of research at CryptoQuant, shares a similar view, emphasizing that the theory overlooks a more obvious driver: since early October 2025, spot Bitcoin demand has sharply declined.

He also notes that attributing market moves to Jane Street’s operations ignores the delta-neutral position management common among many trading firms.

These counterarguments highlight a core weakness of the rumor: before 2026, Bitcoin has already been under macro-driven re-pricing pressure.

Data from SoSo Value shows that institutional investors have been reducing their Bitcoin ETF exposure for five consecutive weeks, with total spot Bitcoin ETF outflows reaching about $4.5 billion.

Meanwhile, Glassnode data indicates that the repeated market pressures earlier this month have triggered structural shifts in the Bitcoin options market toward greater instability.

The firm’s data shows that the entire gamma exposure (GEX) heatmap indicates negative gamma expanding in the current price and below, while positive gamma “resistance walls” above the spot price are receding.

In simple terms: the options positions that usually act as shock absorbers are fading, and the market is increasingly in a zone where hedging no longer cushions declines but amplifies them.

This dynamic is crucial: when prices are in a short-gamma zone, market makers’ delta hedging tends to follow the trend rather than sell into declines or buy into rallies.

As a result: the market can move faster and further on smaller catalysts—raising the risk of larger intraday volatility and cascade moves through key levels—until Bitcoin hits the next thick “gamma wall,” at which point hedging switches back to a buffering mode.

In other words, traders are already in an environment where “intent” can be seen anywhere. Thin liquidity and high leverage mean that any sharp move can appear as organized manipulation.

ETF Channels Are Harder to Read Than They Appear

The deeper issue raised by the Jane Street controversy is structural, not specific to any one firm.

As Jeff Park, CIO of ProCap Financial, explains, the real problem isn’t whether a company is “monopolistically suppressing” Bitcoin, but whether the ETF market structure grants authorized participants discretionary power that’s opaque to the public.

This is important because investors often interpret ETF disclosure data as clear directional signals—yet that’s not the case. Form 13F can show a large long ETF position, but SEC guidelines explicitly exclude short positions, and short options are not netted against long positions.

In practice, the market may see the holdings but not the underlying futures, options, or other hedging tools.

This opacity, compounded by how trust is built, further deepens the problem. BlackRock’s filings for IBIT show that the trust can create and redeem shares through authorized participants and trade with designated Bitcoin counterparties.

As of that filing, these counterparties include affiliates of Jane Street Capital (JSCT, LLC) and Virtu Financial Singapore.

The documents also reveal that the list of authorized participants has expanded to include institutions like JPMorgan, Citadel Securities, Citigroup, Goldman Sachs, UBS, and Macquarie, giving more firms access to ETF creation and redemption mechanisms.

Park argues that this structure distorts outsiders’ interpretation of ETF fund flows.

In the old cash creation model, creating ETF shares required buying spot Bitcoin. But after the SEC approved physical Bitcoin ETP creation and redemption in July 2025, authorized participants gained greater flexibility in acquiring and delivering the underlying assets.

The SEC states this change reduces costs and improves efficiency. But it also means that the exposure of authorized participants can be managed through a broader set of tools and counterparties, making it harder to determine when ETF activity reflects genuine spot demand versus inventory management, basis trading, or hedging.

These are not signs of abuse; Park’s argument does not rely on proving Jane Street or any other firm is acting improperly. His sharper point is: in the post-ETF era, Bitcoin’s market has a black box between public holdings data and the underlying price discovery process.

The start of trading may look like ordinary market-making, and the end as well. What’s hard to observe is the middle: whether hedging is done via spot, futures, swaps, or a combination, and whether natural arbitrage mechanisms truly transmit real spot demand into Bitcoin.

This is why the Jane Street rumors resonate—they are less about accusing a specific participant and more about signaling how limited market understanding has become.

Why U.S. Stock Market Openings Feel Like Sell Pressure Zones

The “10 a.m. theory” sounds plausible because, even without deliberate manipulation, U.S. stock market open is inherently a period of real volatility.

This window involves cross-asset rebalancing, risk adjustments related to stocks, and derivatives hedging.

In markets where ETF intermediaries hedge inventory with futures or other tools, futures can influence spot prices, not just follow them.

When order books are thin, these actions may appear larger and more conspiratorial than they actually are. Bloomberg reported earlier this month that Bitcoin market depth remains over 35% below October levels, highlighting how fragile liquidity has become.

Meanwhile, macro analyst Alex Kruger notes that current data do not support the idea of a “systematic daily 10 a.m. dump.”

He states that since January 1, the cumulative return of IBIT in the 10:00-10:30 a.m. window has been +0.9%, with the 10:00-10:15 segment down 1%.

In his view, this is noise, not evidence of a repeatable suppression program.

More importantly, he points out that the pattern of these two windows aligns closely with Nasdaq’s overall risk asset re-pricing, indicating a macro-driven adjustment rather than Bitcoin-specific manipulation.

This interpretation aligns better with the broader market context.

If Bitcoin increasingly trades as a macro risk asset via ETFs, then the pressure at U.S. stock open—especially in illiquid markets—repeating across the intraday window, is not surprising.

On-Chain Scarcity Is Clear, But Price Discovery Is Not

Bitcoin’s supply is fixed by protocol. No change in ETF market structure can alter that.

What is changing is the increasing demand—and skepticism—flowing through different channels.

The Jane Street controversy exposes the gap between these two realities. On-chain scarcity is transparent; the institutional overlay is not.

Investors can see ETF circulating shares and some disclosed holdings but cannot observe every hedge, internal net exposure, or cross-market position behind market makers’ books.

This blind spot creates room for misunderstanding and distrust.

Jane Street has faced scrutiny in other markets as well, which does little to improve the situation. In July 2025, Indian regulators issued a temporary order involving Jane Street entities over alleged index manipulation, and Reuters reported that SEBI barred the firm from entering Indian securities markets during the investigation. Jane Street denied any misconduct there too.

While the Indian case is unrelated to Bitcoin, it illustrates why crypto traders are quick to imagine the worst when Jane Street’s name appears in headlines again.

But the facts do not prove that Jane Street is deliberately suppressing Bitcoin.

They show instead that the post-ETF Bitcoin market has become more accessible, more deeply integrated with institutions, and harder for retail investors to interpret.