Why did Bitcoin, which was supposed to surge to $150,000, get cut in half? Could the mastermind behind it be Jane Street?

Article by: Justin Bechler

Translated by: AididiaoJP, Foresight News

Bitcoin should now be at least $150,000, and everyone knows it.

But why isn’t the price reaching that level? A federal lawsuit filed yesterday in Manhattan provides the answer.

Let’s connect three key points for the first time: a federal insider trading case stemming from a private chat group called “Bryce’s Secret”; a program that consistently dumps Bitcoin at 10 a.m. every day in 2025 to suppress its price; and an undisclosed derivatives ledger—possibly enabling the world’s largest Bitcoin ETF holdings to be used as a tool to suppress Bitcoin.

All three clues point to the same name: Jane Street Capital.

Intern

It all starts with an intern named Bryce Pratt.

Bryce previously interned at Terraform Labs, the Singapore-based company behind algorithmic stablecoin UST and its token Luna. In September 2021, he left Terraform to join Jane Street as a full-time employee.

Jane Street is also where SBF learned trading, later founding FTX and Alameda Research. Many of his colleagues either came from Jane Street or have close ties to it.

According to a lawsuit filed by Terraform’s bankruptcy trustee Todd Snyder, Bryce used a chat group—referred to in court documents as “Bryce’s Secret”—to act as a bridge between his former and new employers.

The lawsuit alleges that Jane Street exploited this group to obtain significant non-public information about Terraform’s internal funds.

The critical moment was May 7, 2022. Terraform withdrew $150 million of UST from Curve’s 3pool—a major liquidity pool for the stablecoin. Within ten minutes of this withdrawal, before any public announcement, a wallet related to Jane Street pulled $85 million of UST from the same pool.

What happened next is well known. Selling pressure caused UST to decouple, and within days, Luna’s algorithmic mechanism spiraled out of control—tokens flooded the market, $40 billion in market cap evaporated, and retail investors lost everything.

The lawsuit claims that Jane Street precisely closed out positions hours before the Terraform ecosystem collapsed, avoiding over $200 million in potential losses. The court documents plainly state: “These trades could not have been executed without insider information.”

Jane Street responded that the lawsuit was “ridiculous” and “baseless,” claiming that the losses suffered by Terra and Luna holders were caused by Terraform’s own fraud.

By the way, Do Kwon is now serving a 15-year sentence. Snyder also sued Jump Trading for $4 billion, suggesting a broader investigation into institutional behavior during Terra’s collapse—not just targeting Jane Street.

The Clock Starts Turning

From late 2024 into 2025, Bitcoin’s price exhibited a baffling pattern that puzzled traders:

Every day at 10 a.m. Eastern Time—just as the U.S. stock market opens—Bitcoin would experience a sharp dump. This decline was highly precise, clearly algorithmic, and wildly disproportionate, unrelated to overall market trends. It specifically targeted leveraged longs, triggering cascade liquidations, then within hours, the price would rebound.

Blockchain analytics firm Glassnode’s founders tracked this pattern over several months. Their data showed the pattern was unmistakable. In December 2024, Bitcoin’s price dropped from $89,700 to $87,700 within minutes after opening, wiping out $171 million in long positions, then gradually recovered.

This happened every single day.

As a designated market maker and authorized participant for multiple Bitcoin ETFs, Jane Street holds spot Bitcoin and has the infrastructure to execute large-scale sell-offs. During periods of low liquidity, it can open dumps to push prices down, triggering leveraged traders’ liquidations, then buy back at lower prices. This seamless operation involves creating a downward move first, then bottom-fishing.

Then something interesting happened.

Glassnode’s founders noted that after the public release of Terraform’s lawsuit documents early last year, this daily flash crash pattern stopped. Bitcoin’s price stabilized noticeably. It was no coincidence—obvious that the firm suddenly realized regulators might be scrutinizing their activities.

But this stability didn’t last long. By Q3 2025, the 10 a.m. dumps resumed, and by year’s end, the pattern was fully back.

In essence: when lawyers are watching, Jane Street stops dumping; once the scrutiny subsides, it resumes.

Quantitative Machines

In Q4 2025, Jane Street disclosed in its 13F filings that it held over 20.3 million shares of IBIT (BlackRock’s Bitcoin ETF), worth about $790 million. During that quarter alone, it increased holdings by 7.1 million shares, valued at $276 million. At one point last year, its total IBIT holdings neared $2.5 billion.

Meanwhile, it aggressively bought MicroStrategy stock, increasing holdings by 473% to over 950,000 shares, worth about $121 million. During the same period, BlackRock and Vanguard sold billions worth of MicroStrategy shares.

Many crypto media outlets saw this 13F and exclaimed, “Wow, institutions are entering!” But seasoned market observers immediately saw the signs of something else.

Does this look like a bullish bet on Bitcoin, with large-scale accumulation? Not necessarily—because that’s not what Jane Street does.

Jane Street is one of only four firms authorized to create and redeem IBIT in-kind—others include Virtu Americas, J.P. Morgan, and Marex. It’s also an authorized participant for Fidelity and WisdomTree Bitcoin ETFs. What does that mean? It means Jane Street can directly interact with the pipeline linking ETF prices to real Bitcoin. It can use actual Bitcoin to arbitrage between ETF and spot prices, and accumulate holdings that ordinary investors can’t access.

In other words, Jane Street controls the “water pipe” connecting Bitcoin ETFs and real Bitcoin—others do not.

The Invisible Ledger

Former hedge fund manager Michael Green says that interpreting Jane Street’s 13F as a bullish signal “makes him uncomfortable.” He points out that Jane Street’s IBIT holdings are “almost certainly offset by undisclosed options and futures positions,” and “they’re definitely not building a Bitcoin position—this is standard market-making activity.”

Former prop trader Ryan Scott is more direct: “Anyone who takes this as a positive is a ‘death row inmate’ of finance. It should be understood as: ‘Who else is holding undisclosed hedging derivatives?’”

Nicolas Batyia sums it up: Jane Street’s IBIT holdings are for selling options, arbitrage, and executing rapid quantitative trades.

What does this mean for anyone holding Bitcoin or IBIT?

13F only discloses long stock positions, not options, futures, or swaps. So when Jane Street reports holding $790 million in IBIT stock, you have no idea whether those shares are hedged with puts, offset with short futures, or packaged into complex options strategies—possibly with zero or even negative exposure to Bitcoin (i.e., short positions).

The public only sees buying activity. But the actual positions could be huge shorts—because the hedged portion, under current disclosure rules, remains invisible.

13F is like a half-photo—only half of Jane Street’s position is visible; the other half is hidden.

Therefore, every Bitcoin holder must confront a critical question: if Jane Street holds $790 million in IBIT and hedges with $790 million in puts or short futures, the net position is zero. If its derivatives positions exceed its stock holdings, the net could be negative—meaning, as Bitcoin falls, it profits.

In such a scenario, Jane Street has ample motivation to use its privileged status as an authorized participant to dump spot Bitcoin, trigger liquidations, and profit from the spread.

The question is: does Jane Street see Bitcoin as bullish or bearish? Under current disclosure rules, it doesn’t have to say.

Precedent

Jane Street’s activities in the Bitcoin market haven’t yet been scrutinized by regulators, but it has been investigated elsewhere.

In 2025, India’s Securities and Exchange Board (SEBI) issued a 105-page penalty order accusing Jane Street of manipulating the BANKNIFTY index options market.

SEBI found that Jane Street profited ₹365 billion (~$4.3 billion) over two years through coordinated trading in spot and derivatives markets, earning ₹73.5 billion (~$880 million) in a single day. The regulator explicitly stated such behavior is illegal in any well-regulated financial jurisdiction. It then restricted Jane Street’s trading activities.

Look at its pattern in India’s index derivatives: leveraging speed and scale, it first manipulates one market, then harvests profits from the derivatives layer above.

The question now: is the Bitcoin market similarly susceptible?

21 Million

The cap of 21 million Bitcoin is maintained collectively by a global network of nodes.

But this cap only works if price discovery is honest—that the market reflects true supply and demand. Institutions holding Bitcoin or related products do so because they genuinely believe in it, not because they’re using it as raw material for unseen derivative strategies.

In other words, the 21 million limit only makes sense if the market is honest.

And now?

Jane Street is one of only four firms with the infrastructure to create and redeem Bitcoin ETFs in-kind. It’s under federal investigation, accused of front-running with insider info, contributing to a $40 billion loss in market cap. It’s alleged to have used programmatic dumps to suppress Bitcoin’s price for months. It holds the largest disclosed ETF position and maintains an undisclosed derivatives ledger—one that could make it appear bullish while actually being bearish.

Thus, the 21 million cap is just a number to Jane Street. It can create “synthetic” Bitcoin through undisclosed derivatives on top of its ETF holdings.

While Bitcoin’s protocol-level scarcity is real, the price discovery mechanism above has been compromised by a company that treats privilege as a cash machine. Current disclosure rules enable it to continue this game unnoticed.

Every Bitcoin holder should ask themselves: what are Jane Street’s true positions—long or short? Until then, the market isn’t truly in control; Jane Street is.