Cryptocurrency investors accused quantitative trading firm Jane Street of pressuring Bitcoinโs price with a daily, programmatic selloff at the US market open, but market analysts and data suggest the pattern is not consistent, and no single firm can force Bitcoin into a prolonged bear market.
The claims surged online a day after Terraform Labsโ court-appointed administrator sued Jane Street, alleging insider trading tied to transactions that worsened the collapse of Terraโs algorithmic stablecoin ecosystem back in May 2022.
Several market watchers, including crypto influencer Justin Bechler, have argued that Jane Streetโs holding of BlackRockโs iShares Bitcoin Trust exchange-traded fund (ETF), known as IBIT, could mask a net short Bitcoin position through hedges that do not appear in public filings. Bechler argued that Jane Street conducted coordinated algorithmic selling of Bitcoin at 10:00 am Eastern Time daily, manipulating the Bitcoin (BTC) price to buy the ETF at a discount.
โWhen Jane Street reports holding $790 million in IBIT shares, the filing tells you nothing about whether those shares are hedged by puts, offset by short futures, or wrapped in a collar that makes the firm’s net Bitcoin exposure zero or even negative,โ wrote Bechler, adding that the โactual position could be a massive short,โ which looks like a long position that is โinvisibleโ under current disclosure rules.
CryptoQuantโs head of research, Julio Moreno, cautioned that the activity Bechler described is not unique to one firm. He said buying spot exposure while selling futures is a common approach for delta-neutral funds seeking to capture spreads rather than directional price moves.
Jane Streetโs latest 13-F filing also disclosed holdings in Strategy, as well as sizable positions in Bitcoin mining firms Bitfarms, Cipher Mining and Hut 8.
Claims focus on 10 am Bitcoin dump
The online narrative centers on the idea that Bitcoin regularly drops shortly after 10 am ET, a window that overlaps with the start of US trading. Onchain analyst Nonzee posted an hourly Bitcoin chart on Wednesday and claimed Jane Street had been โmanipulatingโ the market at that time for months.
Crypto market watcher account Whale Factor claimed Bitcoin has consistently registered a 2% to 3% daily drop minutes after the US open, alleging a programmatic manipulation ongoing since early November.
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โMany traders point to Jane Streetโs massive $2.5B+ position in BlackRockโs IBIT as the likely driver: engineered liquidity sweeps to accumulate spot #ETFโs at a discount,โ said Whale Factor in a Dec. 9 X post.
Macro analyst Alex Krรผger disputed the framing, sharing blockchain data pointing to Bitcoin recording cumulative returns of 0.9% in the 10:00 am to 10:30 am ET window since Jan. 1, claiming it was not a โsystemic dump.โ
โEveryone says Bitcoin dumps at 10 AM every day. I pulled the data, and it’s not true,โ wrote Krรผger in a Thursday X post, adding that the โ 10 AM dumpโ theory is a broad risk-asset repricing that tracks the price performance of the Nasdaq stock index.
Analysts say one firm canโt drive a bear market
Even if certain trading strategies amplify volatility around the US open, some market participants said it is unlikely that one entity can dominate a global market as deep and fragmented as Bitcoin. โRegardless of whether market manipulation has taken place, Bitcoinโs price isnโt driven by just one firm, no matter how influential. It isnโt a memecoin,โ said Nick Puckrin, the co-founder and lead market analyst at educational platform Coin Bureau.
โItโs understandable that investors with strong conviction in Bitcoin are looking for a villain during a major downturn. But the reality of Bitcoin market dynamics is much more nuanced.โ
Puckrin said Bitcoinโs recent weakness is better explained by a mix of geopolitical uncertainty, global liquidity conditions and competition for investor attention from the fast-growing artificial intelligence sector.
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