Why did Bitcoin, which was supposed to surge to $150,000, get cut in half? Could the mastermind behind it be Jane Street?

Article by: Justin Bechler

Translated by: AididiaoJP, Foresight News

Bitcoin should now be at least $150,000, and everyone knows it.

But why isn’t the price reaching that level? A federal lawsuit filed yesterday in Manhattan provides the answer.

Let’s connect three key pieces for the first time: a federal insider trading case stemming from a private chat group called “Bryce’s Secret”; a program that consistently dumps Bitcoin at 10 a.m. every day in 2025 to suppress its price; and an undisclosed derivatives ledger—possibly enabling the world’s largest Bitcoin ETF holdings to be used as a tool to suppress Bitcoin.

All three clues point to the same name: Jane Street Capital.

Intern

It all starts with an intern named Bryce Pratt.

Bryce previously interned at Terraform Labs, the Singapore-based company behind the algorithmic stablecoin UST and its token Luna. In September 2021, he left Terraform to join Jane Street as a full-time employee.

Jane Street is also where SBF learned trading, later founding FTX and Alameda Research. Many of his colleagues either came from Jane Street or have close ties to it.

According to a lawsuit filed by Terraform’s bankruptcy trustee Todd Snyder, Bryce used a chat group—referred to in court documents as “Bryce’s Secret”—to act as a bridge between his former and new employers.

The lawsuit alleges that Jane Street exploited this group to obtain significant non-public information about Terraform’s internal funds.

The critical moment was May 7, 2022. Terraform withdrew $150 million of UST from Curve’s 3pool—a decentralized exchange liquidity pool that was the main liquidity source for UST. Within ten minutes of this withdrawal, before any public announcement, a wallet related to Jane Street pulled out $85 million of UST from the same pool.

What happened next is well known. Selling pressure caused UST to decouple, and within days, Luna’s algorithmic mechanism completely failed, with tokens being minted wildly, wiping out $40 billion in market cap and leaving retail investors with total losses.

The lawsuit claims that Jane Street precisely closed out positions hours before the Terraform ecosystem collapsed, avoiding over $200 million in potential losses. The court documents plainly state: “Without insider information, these trades would have been impossible.”

Jane Street responded that the lawsuit was “ridiculous” and “baseless,” claiming that the losses of Terra and Luna holders were caused by Terraform’s own fraud.

By the way, Do Kwon is now serving a 15-year sentence. Snyder also sued Jump Trading for $4 billion, suggesting a systematic investigation into institutional behavior during Terra’s collapse—not targeting Jane Street alone.

The Clock Turns

Starting late 2024 and intensifying into 2025, Bitcoin’s price exhibited a baffling pattern for traders:

Every day at 10 a.m. Eastern Time, right as the U.S. stock market opens, Bitcoin would experience a sharp dump. This decline was highly precise, clearly algorithmic, and wildly disproportionate—completely disconnected from overall market trends. It specifically triggered high-leverage longs to liquidate, causing a cascade of liquidations, then the price would rebound within hours.

Blockchain analytics firm Glassnode’s founders tracked this pattern over several months. Their data showed how obvious it was: in December 2024, Bitcoin dropped from $89,700 to $87,700 within minutes after opening, wiping out $171 million of long positions, then slowly recovered.

This happened every single day.

As a designated market maker and authorized participant for multiple Bitcoin ETFs, Jane Street holds spot Bitcoin and has the infrastructure to execute large-scale sell-offs. During periods of low liquidity, it could open dumps to push prices down, triggering leveraged traders’ liquidations, then buy back at lower prices. This seamless operation—first creating a dip, then bottom-fishing—appears to be a deliberate strategy.

And then, something interesting happened.

Glassnode’s founders noted that after the public release of Terraform’s lawsuit documents early last year, this daily flash crash pattern stopped. Bitcoin’s price stabilized noticeably. It was no coincidence—obvious that the firm suddenly realized regulators might be scrutinizing their activities.

But this stability didn’t last long. By Q3 2025, the 10 a.m. dumps resumed, and by year’s end, the pattern was fully back.

In essence: when lawyers are watching, Jane Street doesn’t dump; once the coast is clear, it resumes.

Quantitative Machines

In Q4 2025, Jane Street disclosed in its 13F filings that it held over 20.3 million shares of IBIT (BlackRock’s Bitcoin ETF), worth about $790 million. In that quarter alone, it increased holdings by 7.1 million shares, valued at $276 million. At one point last year, its total IBIT holdings neared $2.5 billion.

At the same time, it aggressively bought MicroStrategy stock, increasing holdings by 473% to over 950,000 shares worth about $121 million. Meanwhile, BlackRock and Vanguard sold billions worth of MicroStrategy shares.

Many crypto media outlets saw this 13F and exclaimed, “Wow, institutions are entering!” But seasoned market observers immediately saw something was off.

Does this look like a bullish bet on Bitcoin, with heavy accumulation? Not necessarily. That’s not what Jane Street does.

Jane Street is one of only four firms authorized to create and redeem IBIT in-kind—others include Virtu Americas, J.P. Morgan, and Marex. It’s also an authorized participant for Fidelity and WisdomTree Bitcoin ETFs. What does that mean? It means it can directly interact with the ETF’s underlying Bitcoin, arbitrage between the fund’s price and spot Bitcoin, and accumulate large amounts of Bitcoin that ordinary investors can’t access.

In other words, Jane Street controls the “pipeline” connecting Bitcoin ETFs to actual Bitcoin—something others don’t have.

The Invisible Ledger

Former hedge fund manager Michael Green said that interpreting Jane Street’s 13F as a bullish signal “makes him uncomfortable.” He pointed out that the IBIT holdings “are almost certainly offset by undisclosed options and futures positions,” and that “they’re definitely not building a Bitcoin position—this is standard market-making activity.”

Former prop trader Ryan Scott put it more bluntly: “Anyone who takes this as a positive is a ‘death row inmate’ of finance. Think of it as: ‘Who else is holding undisclosed hedging derivatives?’”

Nicolas Baty summarized succinctly: Jane Street’s IBIT holdings are for selling options, arbitrage, and executing rapid quantitative trades.

What does this mean for anyone holding Bitcoin or IBIT?

Since 13F only discloses long stock positions, not options, futures, or swaps, you have no idea whether Jane Street’s $790 million in IBIT stocks are hedged with puts, offset with short futures, or packaged into complex options strategies—possibly with zero or even negative net exposure to Bitcoin (i.e., short).

The public only sees the buying and selling. But its actual positions could be massively short—because the hedged portion isn’t disclosed under current rules.

13F is like a half-photo—only half of Jane Street’s position is visible; the other half remains a secret.

Every Bitcoin holder must ask themselves: if Jane Street holds $790 million in IBIT and hedges with $790 million in puts or short futures, then its net position is zero. If its derivatives positions are larger than its stock holdings, then its net is negative—that is, it profits when Bitcoin falls.

In that case, it has every incentive to use its privileged status as an authorized participant to dump spot Bitcoin, trigger liquidations, and profit from the spread.

The question is: does Jane Street see Bitcoin as bullish or bearish? Under current disclosure rules, it doesn’t have to say.

Precedent

Jane Street’s activities in the Bitcoin market haven’t been scrutinized by regulators yet, but it has been investigated elsewhere.

In 2025, India’s Securities and Exchange Board issued a 105-page penalty order accusing Jane Street of manipulating the BANKNIFTY index options market.

The SEBI found that Jane Street profited 36.5 billion rupees (about $430 million) over two years through coordinated trading in spot and derivatives markets, earning 7.35 billion rupees ($88 million) in a single day. The regulator made it clear: such behavior is illegal in any well-regulated financial jurisdiction. It then restricted Jane Street’s trading activities.

Look at its pattern in Indian index derivatives: leveraging speed and scale, it first manipulates one market, then harvests profits from the derivatives layer above.

The question now is: is the Bitcoin market also susceptible to the same tactics?

The 21 Million Cap

The 21 million cap is maintained collectively by a global network of Bitcoin nodes.

But this cap only works if price discovery is honest—that the market reflects real supply and demand. Institutions holding Bitcoin or related products do so because they genuinely believe in it, not because they’re using it as raw material for unseen derivative strategies.

In other words, the 21 million only makes sense if the market is honest.

And what about now?

Jane Street is one of only four firms with the infrastructure to create and redeem Bitcoin ETFs in-kind. It’s currently under federal indictment, accused of front-running with insider info, contributing to a $40 billion market cap wipeout. It’s alleged to have used programmatic dumping to suppress Bitcoin’s price for months. It holds the largest disclosed ETF position and maintains an undisclosed derivatives ledger—one that could make it appear bullish while actually being bearish.

Therefore, the 21 million limit is just a number to Jane Street. It can create “synthetic” Bitcoin through undisclosed derivatives on top of its ETF holdings.

While Bitcoin is inherently scarce at the protocol level, the price discovery mechanism above has been compromised by a company that treats privilege as a cash machine. Current disclosure rules enable it to continue this game unnoticed.

Every Bitcoin holder should ask: what are Jane Street’s true long and short positions?

Until then, Bitcoin’s price isn’t determined by the market—it’s controlled by Jane Street.