Why did Bitcoin, which was supposed to hit $150,000, get cut in half, and the mastermind behind it is actually Jane Street?

Written by: Justin Bechler

Compiled by: AididiaoJP, Foresight News

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

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

Let’s connect three things for the first time: a federal insider trading case linked to a private group chat called "Bryce's Secret"; a program that has been suppressing Bitcoin prices by crashing the market at exactly 10 AM every day until the end of 2025; and an undisclosed derivatives book—one that may have turned the world's largest Bitcoin ETF holdings into a tool for suppressing Bitcoin.

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

Intern

It all starts with an intern named Bryce Pratt.

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

Jane Street is also where SBF learned to trade before he founded FTX and Alameda Research. Many of his colleagues either came from Jane Street or have deep connections to it.

According to a lawsuit filed by Terraform's bankruptcy administrator Todd Snyder, Bryce became a bridge between his old employer and his new one through a chat group referred to in court documents as "Bryce's Secret."

The lawsuit alleges that Jane Street used this group to gain significant non-public information about Terraform's internal funding movements.

The critical moment was on May 7, 2022. Terraform withdrew $150 million of UST from a decentralized trading platform called Curve 3pool—this was the main liquidity pool for the stablecoin. Within ten minutes of the withdrawal, before Terraform had publicly announced any news, a wallet associated with Jane Street withdrew $85 million of UST from this pool.

What happened next is well known. The selling pressure caused UST to begin to decouple, and within days, Luna's algorithmic mechanism completely unraveled, leading to a massive increase in token issuance, evaporating $40 billion in market value, and leaving retail investors with nothing.

The lawsuit claims that Jane Street precisely liquidated its positions "just hours before the collapse of the Terraform ecosystem," avoiding potential losses of over $200 million. The documents state plainly: these trades "would not have been possible without insider information."

Jane Street's response was that the lawsuit is "ridiculous" and "baseless," claiming that the losses suffered by Terra and Luna holders were due to Terraform's own fraud.

By the way, Do Kwon is currently serving a 15-year prison sentence. Snyder has also sued Jump Trading on similar grounds, seeking $4 billion in damages—indicating that this is a systematic investigation into institutional behavior during the Terra collapse, not just targeting Jane Street.

The Clock Starts Ticking

Starting from the end of 2024 and escalating into 2025, Bitcoin prices exhibited a phenomenon that left traders baffled:

Every day at 10 AM (Eastern Time), coinciding with the opening of the U.S. stock market, Bitcoin would face a sudden and severe sell-off. This drop was very precise, clearly the work of a program, and the magnitude was outrageous, completely unrelated to the overall market trend. It specifically targeted highly leveraged long positions, triggering a chain reaction of liquidations, only for the price to rebound within hours.

The two founders of blockchain analytics firm Glassnode documented this pattern. They tracked trading data for several months and found the trend to be strikingly obvious. Charts from last December showed that within minutes of the market opening at 10 AM, Bitcoin dropped from $89,700 to $87,700, with $171 million in long positions evaporating instantly, only for the price to gradually recover.

This happened every day, without fail.

As a designated market maker and authorized participant for multiple Bitcoin ETFs, Jane Street has both spot holdings and the infrastructure for large-scale sell-offs. By crashing the market during periods of low liquidity, they can lower prices, trigger a cascade of liquidations among leveraged traders, and then buy back at lower prices. This operation is seamless: first creating a drop, then bottom-fishing.

Then something interesting happened.

The founders of Glassnode noted that just after the lawsuit documents from Terraform were made public at the beginning of last year, these daily flash crashes stopped. Bitcoin prices stabilized significantly. This was no coincidence—it was clear that the company suddenly realized that lawyers were coming to audit.

However, this stability did not last long. In the third quarter of 2025, the 10 AM sell-off returned, and by the end of the year, it had completely resumed its former "glory."

In simple terms: Jane Street was cautious about crashing the market when lawyers were watching, but resumed once the scrutiny faded.

Quantitative Machines

In the 13F filings for the fourth quarter of 2025, Jane Street disclosed that it held over 20.31 million shares of IBIT (BlackRock's Bitcoin ETF), valued at approximately $790 million. In that quarter alone, it increased its holdings by 7.1 million shares, worth $276 million. At one point last year, its total IBIT holdings approached $2.5 billion.

At the same time, it aggressively bought MicroStrategy stock, increasing its holdings by 473%, totaling over 950,000 shares, valued at approximately $121 million. Meanwhile, BlackRock and Vanguard were selling off MicroStrategy stock, offloading billions.

Many crypto media outlets saw this 13F filing and exclaimed, "Wow, institutions are getting in!" But those who truly understand market structure could see that something was off.

Doesn't it seem like they are bullish on Bitcoin and building a large position? That’s because you don’t understand what Jane Street does.

Jane Street is one of only four firms that can "create and redeem" IBIT physically; the other three are Virtu Americas, JPMorgan, and Marex. It is also an authorized participant for Fidelity and WisdomTree Bitcoin ETFs. What does this status mean? It means they have direct access to the pipeline connecting ETF prices and real Bitcoin. They can enter and exit ETFs with real Bitcoin, arbitraging between fund prices and spot prices, and hoarding what ordinary people cannot.

In other words, Jane Street holds the "pipeline" connecting Bitcoin ETFs and real Bitcoin, while others do not.

Invisible Book

Former hedge fund manager Michael Green said that those interpreting Jane Street's 13F filing as a bullish signal make him "uncomfortable." He pointed out that Jane Street's IBIT holdings "are almost certainly offset by undisclosed options and futures positions," and "they are definitely not building a Bitcoin position; this is standard market-making practice."

Former proprietary trader Ryan Scott was more direct: "Anyone who takes this as good news is essentially a 'death row inmate' in finance. This should be understood as: 'Guess who else holds undisclosed hedging derivatives?'"

Nicholas Batia summed it up in one sentence: Jane Street holds IBIT to sell options, arbitrage, and engage in various quantitative trading activities.

What does this mean for anyone holding Bitcoin or IBIT?

The 13F filing only discloses long stock positions and does not require the disclosure of options, futures, or swaps. So when Jane Street claims to hold $790 million in IBIT stock, you have no idea whether those stocks are hedged with put options, offset with short futures, or wrapped in some options strategy—it's possible that their actual risk exposure to Bitcoin is zero, or even negative (i.e., short).

The public only sees them buying and buying. But their actual position could very well be a massive short—because that half that’s hedged is completely invisible under current disclosure rules.

The 13F is like a photo that only captures half of the body; only Jane Street knows what the other half looks like.

So every Bitcoin holder must ask an unavoidable question: If Jane Street holds $790 million in IBIT and has hedged it with $790 million in put options or short futures, then the net position is zero. If its derivatives positions are larger than its stock positions, then the net position is negative—meaning that if Bitcoin falls, they actually profit.

In this case, they have ample motivation to use their privileged position as an authorized participant to crash the spot price, triggering others' liquidations, and profit from the spread.

The question arises: Is Jane Street bullish or bearish on Bitcoin? Under the current disclosure rules, it does not have to answer.

Precedent

Jane Street's behavior in the Bitcoin market has not been scrutinized by regulators, but it has been in other markets.

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

The Indian SEC found that Jane Street earned 365 billion rupees (about $4.3 billion) over two years through coordinated trading in the spot and derivatives markets, with a single day’s profit reaching 73.5 billion rupees (about $8.8 billion). The regulatory agency stated plainly: such behavior is illegal in any country with normal financial regulation. They then restricted Jane Street's trading activities.

You can see its operational model in Indian index derivatives: leveraging speed and scale advantages, first causing disruptions in one market, then harvesting profits in the derivatives market above.

Now the question is, is the Bitcoin market the same?

21 Million

The hard cap of 21 million is maintained by a network of Bitcoin nodes distributed globally.

But for this cap to be effective, there is a prerequisite: price discovery must be genuine, and the market must reflect real supply and demand. Institutions holding Bitcoin or Bitcoin-related products should do so because they genuinely believe in it, not because they are using it as "raw material" for invisible derivative strategies.

In other words, the 21 million cap only makes sense if it is based on the foundation of "the market is honest."

And now?

Jane Street is one of the four companies that hold the keys to Bitcoin ETF infrastructure. It is being sued by the federal government for allegedly profiting from insider information, helping to wipe out $40 billion in market value. It is accused of using programmed sell-offs to suppress Bitcoin prices for several months. It holds the largest publicly disclosed ETF position while also maintaining a derivatives book—one that may make it appear bullish, while in reality, it is bearish.

Thus, the 21 million cap, in front of Jane Street, is just a number. Because it can create "synthetic" Bitcoin infinitely through undisclosed derivatives on top of its ETF inventory.

Bitcoin is indeed scarce at the protocol level, but the price discovery mechanism above it has been corrupted by a company that treats privilege as an ATM. And the current disclosure rules conveniently allow it to continue doing so, with no one able to see.

Every Bitcoin holder should know the answer: What is Jane Street's true position—long or short?

Until this is known, it is not the market that decides Bitcoin's price; it is Jane Street.