Accusations have emerged that Jane Street used coordinated trades to pressure bitcoin prices near U.S. market opens, then profited from derivative positions.

Background on Jane Street

Founded in 2000 in New York, Jane Street is a multinational trading firm and market maker with more than 3,000 employees worldwide.

The firm is a major liquidity provider on U.S. exchanges and acts as an authorized participant for several spot bitcoin ETFs, including BlackRock IBIT and Fidelity.

Morning-dump theory

One theory circulating widely claims Jane Street accumulated spot bitcoin, opened large derivative shorts and sold into low liquidity windows at 10:00 New York time.

Proponents say this sequence—sell into low liquidity, trigger price falls, cover profitable shorts and re-buy cheaper bitcoin—repeated daily and moved retail positions.

Observers have pointed to a significant position in BlackRock IBIT of approximately $2.5 B+ as a potential catalyst for such activity.

Counterarguments and market correlation

Crypto analyst Alex Kruger reported that from early January the cumulative return for IBIT between 10:00 and 10:30 equals 0.9%, showing no systematic dumps.

Kruger additionally noted that price moves during that half hour closely mirror Nasdaq dynamics, implying crypto declines follow broader equity risk repricing at that hour.

Legal filings and transactional traces

Terraform Labs filed a lawsuit in Manhattan alleging Jane Street’s involvement in the 2022 Terra collapse and cited specific on-chain flows.

On 07.05.2022 Terraform reportedly removed $150 M of UST from a Curve liquidity pool, and roughly ten minutes later a wallet linked to Jane Street withdrew about $85 M.

Separately, an Indian regulator in July 2025 accused Jane Street of manipulating the Bank Nifty index and temporarily froze suspected proceeds totaling $566 M.

Assessment and next steps

Some market participants dismiss the allegations as speculation and point to ordinary market making and high-frequency trading explanations for observed patterns.

Others note that lawsuits and regulatory actions warrant investigation to determine where routine liquidity provision ends and manipulation begins.

Courts and regulators will determine whether the cited transactions and patterns constitute illegal conduct or fall within standard market activity.