Was Jane Street behind the bitcoin crash? A deep dive into why that theory may not not hold

Bitcoin Bitcoin$68,269.72 Since late 2025, Bitcoin prices have been falling like clockwork every morning after New York markets opened, with crypto fans on X blaming Jane Street for the situation.

Theories about

However, observers point to market data and the inner workings of exchange-traded fund (ETF) authorized participants like Jane Street as indicating otherwise.

CoinDesk contacted Jane Street for comment on the BTC allegations but had not received a response as of European morning time.

accusation

The claim, spread in dozens of viral posts, goes something like this: Jane Street, one of the world’s largest trading firms, systematically sells Bitcoin every day at 10 a.m. ET to drive down the price, and then snaps up ETFs at a bargain price.

“Bitcoin has consistently sold off ~2-3% within minutes of the US cash open (10am ET) on nearly every trading day since early November. Many traders pointed to Jane Street’s massive $2.5B+ position in BlackRock IBIT as a possible driver: a carefully orchestrated liquidity sweep to accumulate spot ETFs at discounts,” widely followed X account Whale Factor said in December.

Recent 13th Floor filings show that Jane Street held approximately $790 million in IBIT stock as of the fourth quarter of 2025.

Jan Happel and Yann Allemann, co-founders of blockchain analytics firm Glassnode, also documented the patterns through their shared

This week, the company was sued by the bankrupt operators of TerraForm Labs for insider trading, hastening Terra’s demise in 2022. If that wasn’t enough, the 10 a.m. swing has disappeared since the proceedings ended. Bitcoin surged more than 6% to nearly $70,000 on Wednesday.

In June last year, India’s SEBI banned Jane Street from entering the local market and froze $566 million in suspected illegal gains for its “pump up in the morning, sell in the afternoon” scheme of manipulating the Bank Nifty index on 18 derivatives expiry dates from January 2023 to March 2025. Therefore, these accusations suggest that Jane Street’s reputation precedes it.

Market data and logic suggest otherwise

However, Jane Street’s conspiracy to secretly undercut the price to snap up IBIT at a bargain price may be challenged using data tracked by crypto economist Alex Kruger, which does not confirm the 10am sell-off.

The IBIT ETF gained about 0.9% in the 10:00-10:30 Eastern time period; at the same time, according to Kruger, the return in the first 15 minutes was -1%. Kruger said on X that this was noisy data, not evidence of systemic dumping.

What’s more, both windows closely mirrored the performance of the Nasdaq, Krueger added, meaning the so-called “10 a.m. sell-off” was part of a broader repricing of risk assets and not a Jane Street prank.

It should be noted that Jane Street is not a rogue operator with unfettered power over Bitcoin, but a single player – an Authorized Participant (AP) – in a regulated ecosystem designed to ensure smooth trading of ETFs.

Yale ReiSoleil, CTO of ethereum financial infrastructure company Untrading, said on

Spot ETFs are funds that track the spot price of Bitcoin and have custody of actual Bitcoins. Their shares trade on stock exchanges and their prices tend to deviate from the net asset value (NAV) of the underlying asset based on demand and supply.

APs such as Jane Street, JPMorgan Chase and Citadel Securities are tasked with creating new ETF shares when demand surges and redeeming them when demand drops, ensuring that ETF prices remain pegged to net asset value.

In the case of Bitcoin ETFs, APs are allowed to be created and redeemed “physically,” and they can exchange a basket of actual BTC directly with the issuing company, not just cash. These dynamics are legitimate, not manipulative, and could lead to 10 AM swings.

Short first, buy later

On a typical day, when BTC rises during the Asian and European sessions, demand for the ETF surges early in the U.S. session. This temporarily pushed the ETF price above its NAV. APs then respond by increasing their supply of stocks—sometimes by short selling stocks they don’t own—to satisfy buyer demand and keep trading smooth.

Typically, shorting requires borrowing shares first, which costs money (such as loan interest), but regulators have exempted those affected from this rule.

Later, when they create new shares, they will not rush to buy spot Bitcoin immediately, but often purchase privately through OTC stores. They then short futures or buy put options to hedge their long exposure to the issuance of new shares.

A combination of these factors could put temporary downward pressure on the market.

ReiSoleil explained: “Thanks to the Reg SHO exemption, APs can short IBIT without borrowing costs. They can hedge their shorts with futures instead of spot. This means that the natural arbitrage that closes the gap between the ETF price and the NAV never occurs because AP never buys spot.”

“Meanwhile, physical creation allows them to privately purchase Bitcoin at their own pace in over-the-counter transactions. The spot market never experiences buying pressure. The beginning looks like market making. The end looks like market making. The middle is where the integrity of price discovery disappears,” he added.

Kruger agreed that the Jane Street conspiracy theory is typical of the pessimism that often follows Bitcoin’s long-term downtrends.

He firmly disagreed with the statement that the “short first and buy later” mechanism adopted by AP temporarily suppressed prices.

“The net demand for Bitcoin spot is the same whether the spot is purchased by APs or basis traders,” he said. He believes that the idea that hedging with futures first (and delaying the immediate purchase of spot) somehow compromises the integrity of price discovery is simply wrong.

Jane Street has not commented publicly, and no on-chain data or transaction records have emerged linking the company to a coordinated effort to drive down the price of Bitcoin.