Jane Street’s Bitcoin Plot: The 10 a.m. Conspiracy!

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The Terraform Lawsuit: “Bryce’s Secret” and a 10-Minute Head Start

Behold, the saga of Terraform Labs’ wind-down administrator Todd Snyder, who, with the fervor of a prophet, filed suit in Manhattan federal court, accusing Jane Street of insider trading so cunning it “hastened” Terraform’s collapse. The complaint, a labyrinth of legal jargon, centers on an intern-turned-employee, Bryce Pratt, and a private chat group dubbed “Bryce’s Secret”-a digital den of vipers, no doubt. Snyder claims this channel granted Jane Street access to material nonpublic information about Terraform’s liquidity operations, a treasure trove of secrets that could make a stablecoin’s peg tremble.

The crux of the matter lies in May 7, 2022, when Terraform withdrew $150 million in TerraUSD (UST) from Curve’s 3pool. Moments later, a wallet allegedly linked to Jane Street swooped in, swapping $85 million UST before the public even knew what hit them. The lawsuit posits that Jane Street used this timing edge to unwind risk “at precisely the right time,” mere hours before the Terraform ecosystem collapsed. A feat so impossible, one might say it defies the laws of physics-and market ethics.

Jane Street, ever the stoic, denies wrongdoing, calling the suit “desperate” and “baseless.” They frame it as a ploy to extract money for losses caused by Terraform’s own antics. Yet, the filing is a masterstroke, thrusting Jane Street-normally the invisible plumbing of markets-into the spotlight of crypto’s most destructive failure. A collapse that wiped out $40 billion, and sparked the 2022 crypto winter, a season of frosty despair.

Jane Street was behind the 2022 crypto winter, alleged Zerohedge, destroying Terraform by first depegging the token and destroying the ecosystem

From Terra to Bitcoin: Where Facts End and Suspicion Begins

The lawsuit does not accuse Jane Street of manipulating Bitcoin. But it casts a shadow over market participants, who now squint at Bitcoin’s tape with the suspicion of a man who suspects his wife of infidelity. Beginning in late 2024, traders fixated on abrupt sell-offs around the U.S. cash-market open-“10 a.m. drops,” they call it. The evidence? Chart-based pattern recognition, social media claims, and post-hoc explanations. Yet, in a world where crypto trades 24/7 but global risk is priced around U.S. hours, such patterns seem plausible. A conspiracy theorist’s dream, perhaps, but not a proof.

This tweet from December shows Bitcoin consistently dumping ~2-3% within minutes of the US cash open (10 a.m. ET) almost every trading day since early November, source: X

The leap into speculation? The claim that a single firm is engineering these moves to harvest liquidations and re-enter lower. Not proven, not backed by trade-level attribution, and not confirmed by regulators. Yet, it’s a logic easy to sell: if you can push price down into thin liquidity at a predictable moment, you can trigger leveraged liquidations that amplify the move, then profit from the volatility and the rebound. A plot worthy of a Bulgakov novel, where every shadow hides a schemer.

The ETF “Pipe”: How Jane Street Became a Suspect by Default

The reason Jane Street is always named in these theories? Structural, not emotional. In spot Bitcoin ETFs, the key actors aren’t the loud retail accounts on X-it’s the authorized participants and market makers who sit closest to the creation/redemption mechanism. Jane Street, a major liquidity provider, disclosed a massive stake in BlackRock’s iShares Bitcoin Trust (IBIT) in its Q4 2025 13F filing: 20.3 million shares valued at $790 million. To the public, this reads as “Jane Street is bullish.” To market-structure people, it reads as “Jane Street is holding inventory.” And inventory, as we know, is not a directional bet-it’s a game of chess, where the pieces are hidden.

To the public, that read as “Jane Street is bullish.” To market-structure people, it read as “Jane Street is holding inventory.” And inventory is not a directional bet-especially because a 13F is a snapshot of certain long positions and does not reveal the full hedge book. That’s why former hedge fund manager Michael Green called the bullish interpretation “painful,” arguing the IBIT position is likely “almost entirely offset” by undisclosed options and futures positions-“that’s how market making works.” Another market participant, former prop trader Ryan Scott, was even more direct: anyone posting it as bullish, he said, is ignoring “offsetting derivative positioning that does not need to be reported.” And Nik Bhatia reduced it to incentives: firms hold ETF shares so they can write options, arbitrage, and run the quantitative playbook-not because they’re “stacking sats” like a retail maxi.

This is the core of the “invisible book” argument: Jane Street can appear massively long in a disclosure while being net-flat or even net-short after options, futures, and swaps. That doesn’t prove suppression. It does explain why a firm might simultaneously hold a large ETF position and still benefit from downside volatility or drawdowns, depending on the hedge structure. A dance of shadows, indeed.

The Precedent: A Regulator Has Already Accused Jane Street of Manipulation Elsewhere

Suspicion thrives on precedent, and Jane Street has one. In July 2025, India’s securities regulator SEBI issued an interim order accusing Jane Street-linked entities of manipulating the Bank Nifty index using coordinated activity across cash and derivatives markets, imposing restrictions and other measures. Reuters reported SEBI’s theory as a classic cross-market strategy: support the index with trades in constituents while holding large options positions, profit in the derivative layer, then reverse. Jane Street disputed the findings and said it would respond and could appeal.

This matters for the Bitcoin narrative because it makes the “could they do something similar?” question feel less like paranoia. But it’s still a different market, a different regulator, and-crucially-an allegation still being contested. It raises the temperature; it doesn’t close the case. A cosmic standoff, perhaps, where the truth is as elusive as a shadow in a candlelit room.

What We Can Say Cleanly: Evidence, Speculation, and the Real Risk

What’s true and documented right now is straightforward: Terraform’s administrator has sued Jane Street in U.S. federal court over alleged insider trading tied to the Terra collapse, pointing to a private chat group and rapid trading around a key liquidity withdrawal, and Jane Street says the claims are baseless. It’s also true that Jane Street disclosed a large IBIT position in a 13F, and that such filings do not reveal the full derivatives hedge book that determines net exposure. It’s true that a major regulator has accused Jane Street-linked entities of cross-market manipulation in India, which the firm disputes.

What remains speculative is that Jane Street ran a systematic “10 a.m.” Bitcoin sell program to suppress price through late 2025 and that the firm’s ETF role enabled it to engineer liquidation cascades at will. That theory has a coherent mechanism, but the public record does not yet provide trade attribution, internal communications, or regulatory findings that prove intent. A mystery wrapped in a riddle, served with a side of skepticism.

What is clear however, is that when the Jane Street theory went public, suddenly the pressure came off Bitcoin and it jumped 7% overnight, source: BNC

The real risk for Bitcoin holders isn’t that “one firm decides the price.” It’s that ETF-era Bitcoin is now intertwined with professional market-making, leverage, and opaque hedging structures that can make price discovery look unnatural even when it’s “just” high-speed inventory management. The uncomfortable truth is that the protocol may be decentralized, but the most influential pipes around it-the ones that connect spot, ETFs, options, and funding markets-are operated by firms whose edge is extracting profit from structure. And that’s why every new legal allegation against a firm like Jane Street instantly metastasizes into a theory about Bitcoin itself. Was Jane Street manipulating the price of Bitcoin? Stay tuned, dear reader, for the next chapter in this tale of shadows and speculation.

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2026-02-26 01:42