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 points for the first time: a private chat group called “Bryce’s Secret” that led to a federal insider trading case; a program that consistently dumps Bitcoin at 10 a.m. until the end of 2025, suppressing its price; and an undisclosed derivatives ledger—potentially turning the world’s largest Bitcoin ETF holdings into tools for price suppression.

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 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 current 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. Within ten minutes of this withdrawal, before any public announcement, a wallet associated with Jane Street pulled $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 spiraled out of control, with tokens being minted wildly, wiping out $40 billion in market cap and leaving retail investors with losses.

The lawsuit claims that Jane Street precisely liquidated its positions hours before the Terraform ecosystem collapsed, avoiding over $200 million in potential losses. 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 Starts Turning

From late 2024 into 2025, Bitcoin’s price exhibited a baffling pattern that traders couldn’t understand:

Every day at 10 a.m. Eastern Time—precisely when the U.S. stock market opens—Bitcoin would face a sharp dump. This decline was highly precise, clearly algorithmic, and wildly disproportionate, unrelated to overall market trends. It specifically targeted leveraged longs, triggering cascade liquidations, then within hours, the price would rebound.

Blockchain analytics firm Glassnode’s founders tracked this pattern over several months. Their data showed how obvious it was. In December last year, a chart showed Bitcoin dropping from $89,700 to $87,700 within minutes after opening, vaporizing $171 million in long positions, then gradually climbing back.

This happened every day, without fail.

As a designated market maker and authorized participant for multiple Bitcoin ETFs, Jane Street holds spot Bitcoin and has the infrastructure to sell large amounts. 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—appeared to be routine.

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 investigating.

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 scrutinizing Jane Street, it stops dumping; once the scrutiny subsides, the dumping 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.

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

Many crypto media outlets saw this 13F and exclaimed, “Wow, institutions are buying!” But seasoned market observers knew better.

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

Jane Street is one of only four firms authorized to create and redeem IBIT in-kind, alongside 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 pipeline linking ETF prices to real Bitcoin. It can use actual Bitcoin to create or redeem ETF shares, arbitrage between fund and spot prices, and accumulate holdings that ordinary investors can’t access.

In other words: Jane Street controls the “water pipe” connecting Bitcoin ETFs to real Bitcoin, and others don’t.

The Invisible Ledger

Former hedge fund manager Michael Green said that those interpreting Jane Street’s 13F 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’re definitely not building a Bitcoin long—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 this way: ‘Who else is holding undisclosed hedging derivatives?’”

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

What does this mean for anyone holding Bitcoin or IBIT?

13F only discloses long stock positions, not options, futures, or swaps. So when Jane Street reports holding $790 million in IBIT stock, you have no idea whether those shares 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 positions).

The public only sees the buying and selling. But its actual positions could be huge shorts—because the hedged portion, under current disclosure rules, remains invisible.

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

So every Bitcoin holder must ask an unavoidable question: if Jane Street holds $790 million in IBIT and hedges with $790 million in puts or short futures, 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 prices, 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 in other markets, it has been investigated.

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 ₹365 billion (~$4.3 billion) over two years through coordinated trading in spot and derivatives markets, earning ₹73.5 billion (~$880 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?

21 Million

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 true 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 now?

Jane Street is one of only four firms with the infrastructure to create and redeem Bitcoin ETF shares in-kind. It’s currently under federal indictment, accused of front-running with insider info, helping wipe out $40 billion in market cap. 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 its privileges as a cash machine. Current disclosure rules enable it to continue this game unnoticed.

Every Bitcoin holder should ask themselves: what are Jane Street’s real positions—long or short?

Until we know, the market isn’t truly determining Bitcoin’s price—Jane Street is.