Most people have never heard of Jane Street. That is by design. The firm is structured specifically to avoid the disclosure requirements that govern banks and hedge funds. Yet by most measures, Jane Street is one of the most powerful trading operations on the planet — generating more trading revenue last year than Goldman Sachs, Citigroup, or Bank of America, and estimated to be involved in over 10% of every stock trade in the United States. Now, a mounting body of evidence suggests this largely invisible firm may be systematically moving the price of Bitcoin using a set of special privileges that come with being an authorized participant in BlackRock's Bitcoin ETF.
What Jane Street Actually Does
Founded in 1999 and headquartered in Manhattan, Jane Street employs roughly 3,000 people with average compensation of around $1.4 million per year. It has no traditional CEO — the firm is run by a management committee of 30 to 40 people. Crucially, by classifying itself as a quantitative trading firm rather than a hedge fund, Jane Street sidesteps many of the public disclosure requirements that apply to other major financial players.
What Jane Street does have is extraordinary influence over capital flows. And at the center of the Bitcoin story is a specific regulatory designation: authorized participant, or AP.
When you buy Bitcoin through an ETF like BlackRock's IBIT, you are not buying Bitcoin directly. You are buying a share of a fund that holds Bitcoin. To keep the ETF's price aligned with actual spot Bitcoin, a small number of firms are authorized to create and redeem shares of the fund. Jane Street is one of only four such authorized participants for IBIT — the largest Bitcoin ETF in the world.
This status comes with two significant powers that ordinary investors do not have. First, authorized participants are exempt from portions of Regulation SHO, the rule governing short selling. Standard investors must borrow a stock before shorting it; APs can create and sell shares under different restrictions. Second, when Jane Street files disclosures showing hundreds of millions of dollars in IBIT holdings, those filings only reflect long positions. They are not required to disclose offsetting short positions, options, futures, or swaps. An $800 million reported position in Bitcoin ETFs could, in practice, represent zero net Bitcoin exposure — or even a net short position. No one outside the firm would know.
The 10:00 A.M. Pattern
Starting around November 2024, traders began noticing something unusual. Bitcoin was dropping 2 to 3% almost every single trading day at almost exactly 10:00 a.m. Eastern — the moment US stock markets open. The pattern was consistent enough to go viral on social media, with analysts documenting that the drops occurred during the lowest liquidity windows of the trading day, when relatively small selling pressure can produce outsized price moves.
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Chart showing repeated Bitcoin price drops at 10:00 a.m. Eastern over multiple trading days
Watch at 08:45 →
Low liquidity amplifies the effect because of liquidations — forced selling that occurs when leveraged traders cannot cover their positions. Once the price drops past a threshold, those traders are automatically sold out, which pushes prices lower, triggering more liquidations in a cascading spiral.
The alleged mechanism, laid out in detail by observers, works roughly as follows: an entity buys spot Bitcoin, opens large short positions on a separate exchange or through derivatives, then sells a significant volume of Bitcoin rapidly at market open during the low liquidity window. The resulting price drop generates profits on the short positions that far exceed the losses on the sold Bitcoin. The entity then closes the shorts, buys back Bitcoin at the lower price, and the renewed buying pressure triggers a recovery — resetting the cycle for another round.
Not everyone accepts this interpretation. Analyst Alex Krueger reviewed the data and concluded that the 10:00 a.m. dip typically reverses by 10:30, suggesting it reflects normal market repricing when US traders enter the session rather than deliberate manipulation. Researchers at CryptoQuant noted that buying spot Bitcoin while shorting futures is a standard delta-neutral strategy used by many institutional funds — one designed to profit regardless of price direction, and not inherently manipulative.
These are reasonable counterarguments. But they become harder to sustain in isolation.
A Pattern Across Multiple Markets
In July 2025, India's securities regulator SEBI — the country's equivalent of the SEC — investigated Jane Street and found the firm guilty of manipulating India's stock market. The documented strategy was described as a morning pump, afternoon dump: Jane Street would push prices up in the morning using one set of trades, then reverse those positions in the afternoon to profit from the decline. Regulators concluded it was a coordinated strategy that exploited predictable price movements the firm itself was generating. As a result, SEBI froze $566 million of Jane Street's assets and banned the firm from trading in India.
This is not a rumor or a theory. It is a verified regulatory finding. Chinese regulators have also flagged Jane Street accounts for allegedly manipulating silver prices through ETF positions, given the firm's substantial holdings in silver ETFs.
The combination of India, China, and now Bitcoin raises an obvious question about whether these are isolated incidents or reflections of a consistent institutional approach.
The Terra Lawsuit and What It Reveals
In February 2025, Jane Street was sued over events from 2022 involving Terra, a $40 billion cryptocurrency ecosystem built around two tokens: Luna and UST, a stablecoin designed to maintain a $1 peg. The system relied on an algorithmic mechanism that created and destroyed Luna tokens to keep UST stable. It functioned as long as market confidence held.
According to the lawsuit, a former intern at Terraform Labs — the company behind Terra — left the project and joined Jane Street, allegedly bringing confidential knowledge of how the system worked. The lawsuit claims this individual was part of a private group chat where former insiders shared non-public information about the project's vulnerabilities, and that Jane Street used this information to build a trading position around Terra's eventual collapse.
On May 7, 2022, $85 million worth of UST was dumped into a decentralized exchange called Curve, overwhelming the liquidity pool and breaking UST's dollar peg. The algorithm responded by minting more Luna tokens, which diluted Luna's value, which triggered more UST selling, which required more Luna minting — a death spiral. Within 72 hours, Luna fell from $80 to near zero. UST followed. Forty billion dollars in value was erased. Millions of people lost savings. The collapse also set off a chain reaction that contributed to the eventual failure of FTX.
The lawsuit alleges Jane Street knew this was coming and had positioned itself to profit from it before the collapse began. Jane Street has not yet formally responded to the allegations.
The significance for the Bitcoin story is straightforward: if the lawsuit's claims are accurate, they establish a clear pattern — a firm with privileged access to market infrastructure, using informational advantages or structural leverage to profit from engineered price moves, across multiple assets and multiple countries.
What the ETF System Made Possible
Bitcoin was created specifically to exist outside the traditional financial system. That was its foundational premise. But the moment Bitcoin was securitized into an ETF product, it acquired something its creators never intended: a small group of authorized middlemen with powers no ordinary participant has, operating under disclosure requirements that leave their true positions largely invisible.
This is not a flaw in Bitcoin. It is a feature of the system that was built around Bitcoin once institutional finance decided to offer it as a product. The authorized participant structure that makes ETFs function efficiently is the same structure that, if abused, could allow a sufficiently large and sophisticated player to move prices during low liquidity windows, hedge in ways regulators cannot easily see, and profit from volatility regardless of direction.
Whether Jane Street has done any of this remains to be established in court and through ongoing regulatory scrutiny. What is already established is that the structural opportunity exists, that Jane Street has been found guilty of comparable strategies in at least one major regulated market, and that the 10:00 a.m. pattern in Bitcoin stopped the same week the lawsuit became public — a week that also saw Bitcoin rise 10%, $200 billion added to the crypto market cap, $213 million in short liquidations, and a $250 million single-day inflow into IBIT.
The broader lesson is not that Bitcoin is compromised. It is that the method of exposure matters. Holding Bitcoin through an ETF means trusting the very financial infrastructure Bitcoin was designed to circumvent. Holding Bitcoin in self-custody — controlling your own private keys in your own wallet — means that price volatility may affect your portfolio's value, but no authorized participant can liquidate your position, and no intermediary stands between you and your asset. That is what self-custody means in practice, and it is the distinction that makes Bitcoin's original promise meaningful.
