Is Jane Street suppressing the price of Bitcoin through its ETF position?

Justin Bechler (@1914ad) published a thread this week that pulled together something crypto traders have been muttering about for months. Jane Street Capital, one of only four firms authorized to create and redeem shares of BlackRock's Bitcoin ETF (IBIT), is now facing a federal lawsuit alleging it used insider information from a private chat group to front-run Terraform Labs before the $40 billion Terra collapse in 2022. That's a serious claim on its own.

But the thread goes further, connecting that lawsuit to a pattern traders have tracked since late 2024: sharp, mechanical sell-offs at exactly 10am Eastern, every trading day. Leveraged longs would get wiped out, liquidation cascades would follow, and prices would bounce back within hours. Glassnode's co-founders documented it publicly. Then it stopped when the lawsuit filings went public, and started again months later once the legal heat died down.

Here's what matters if you trade Bitcoin or hold IBIT. Jane Street's Q4 2025 13F showed roughly $790 million in IBIT shares. Financial media ran it as bullish accumulation. But a 13F only discloses long equity positions. It says nothing about put options, short futures, or swaps sitting on the other side. Former hedge fund manager Michael Green called the bullish read "painful," and former prop trader Ryan Scott was blunter: anyone posting it as bullish doesn't understand how market-making works. The actual net exposure could be zero. It could be negative. Nobody outside the firm knows, because current SEC rules don't require that disclosure. So when you see headlines about institutional conviction in Bitcoin, ask what's behind the number. A $790 million long with a $790 million derivative hedge is not a bet on Bitcoin going up. It's inventory for a trading operation.

None of this is proven. Jane Street calls the Terraform lawsuit "desperate" and "baseless." The 10am pattern is correlation, not causation, and market makers sell into opens as part of normal business. But even if the lawsuit goes nowhere, the structural problem doesn't. Bitcoin's 21 million supply cap is enforced by code. Price discovery is not. It runs through a handful of authorized participants with privileged access to the pipe connecting ETFs to spot markets, and the derivative positions those firms carry are invisible to everyone else. If you trade Bitcoin through a regulated exchange or broker, that gap affects your fills whether Jane Street is doing anything wrong or not.

The original thread by @1914ad is worth reading in full. It walks through the timeline, the filings, and the SEBI enforcement action against Jane Street in India, which adds yet another data point.