Bitcoin’s 10 a.m. Farce: A Tale of Woe and Wallet Woes

by

Markets

What to know, dear reader:

  • Certain crypto enthusiasts, no doubt with quills at the ready, have taken to X (formerly known as Twitter, for those not au courant) to accuse the trading firm Jane Street of a most dastardly deed: allegedly dumping bitcoin at the stroke of 10 a.m. ET to procure spot ETFs at a discount, thus driving prices from the lofty heights of $125,000 to the more modest $62,000.
  • Market data, cited by analysts of repute such as crypto economist Alex Kruger, reveals no such consistent dumping at the bewitching hour of 10 a.m. Instead, it suggests these movements are but a mirror to the broader Nasdaq risk repricing, rather than the machinations of a single firm.
  • Experts, with their noses deep in ledgers and charts, assert that the trading patterns are better explained by the legal intricacies of authorized participants in spot bitcoin ETFs. Critics, however, remain unconvinced, arguing that such structures can dull the spot price discovery, even without the scandal of rule-breaking.

Bitcoin, that fickle darling of the digital age, has plummeted with the regularity of a clockwork orange every morning post the New York market open since late 2025. Crypto aficionados on X have pointed their fingers at Jane Street, as though it were the sole architect of their financial woes.

A theory, as wild as a goose chase, has taken hold among retail participants, who insist that Jane Street single-handedly drove the asset from $125,000 to $62,000 in recent months. Yet, market data and the inner workings of an exchange-traded fund (ETF) authorized participant like Jane Street suggest otherwise, as observers have noted with a raised eyebrow.

CoinDesk, ever the intrepid reporter, reached out to Jane Street for comment on these BTC allegations but received no reply as of the European morning hours. One can only imagine the firm’s clerks sipping their tea, unperturbed by the clamor.

This is INSANE.

Since Jane Street was sued two days ago, the 10 AM manipulation has ceased. Bitcoin is up 10%, adding $120 billion to its market cap, and the BTC weekly candle has turned green after 5 consecutive red candles.

The total crypto market has added nearly $200 billion. Coincidence? I think not. – Bull Theory (@BullTheoryio) February 25, 2026

The Allegations

The claim, spread across dozens of viral posts with the fervor of a village gossip, goes something like this: Jane Street, one of the world’s largest trading firms, was systematically selling bitcoin at 10 a.m. ET every day to push prices lower and then snap up ETFs cheaply. A scheme as elaborate as a Regency ball, but far less charming.

“BTC has been consistently dumping ~2-3% within minutes of the U.S. cash open (10 a.m. ET) almost every trading day since early November. Many traders point to Jane Street’s massive $2.5B+ position in BlackRock’s IBIT as the likely driver: engineered liquidity sweeps to accumulate spot ETFs at a discount,” declared Whale Factor, a widely-followed X account, in December.

The recent 13/F filings revealed that Jane Street held roughly $790 million in IBIT shares as of the fourth quarter of 2025. A sum that, while impressive, hardly warrants the dramatic accusations leveled against it.

Jan Happel and Yann Allemann, the co-founders of blockchain analytics firm Glassnode, have also documented these patterns through their shared X account Negentropic and remarked on Wednesday: “Jane Street Lawsuit gets made public, and miraculously the 10am $btc slam disappears.” One might almost believe in miracles, were it not for the cold, hard facts.

The allegations have exploded this week, after the firm was sued by TerraForm Labs’ bankruptcy operator for insider trading that hastened Terra’s demise in 2022. And, as if that were not enough, the 10 a.m. volatility has vanished in the wake of the lawsuit. Bitcoin surged by over 6% to nearly $70,000 on Wednesday, a turn of events that has tongues wagging.

would you look at that – zerohedge (@zerohedge) February 25, 2026

In June last year, India’s SEBI banned Jane Street from local markets and froze $566 million in alleged illegal gains, citing a “morning pump, afternoon dump” scheme manipulating the Bank Nifty index on 18 derivatives expiry days from January 2023 to March 2025. The accusations, therefore, suggest Jane Street’s reputation precedes it, though one wonders if it is not all much ado about nothing.

Market Data and Logic Suggest Otherwise

The conspiracy that Jane Street has been secretly driving prices lower to snap up IBIT cheap could be challenged, however, using data tracked by crypto economist Alex Kruger, which doesn’t confirm the 10 a.m. dump. A conspiracy as flimsy as a debutante’s fan.

The IBIT ETF has posted cumulative gains of around 0.9% in the 10:00-10:30 ET window; meanwhile, returns in the first 15 minutes have been -1%, according to Kruger. That’s noisy data, not evidence of systematic dumping, Kruger said on X. One might as well accuse the moon of causing tides.

Everyone says bitcoin dumps at 10AM every day.

I pulled the data, and it’s not true.

Since Jan 1, IBIT’s cumulative return in the 10:00-10:30 window is +0.9%, and in the 10:00-10:15 window it’s -1%. Noisy, not a systematic dump.

More interesting: the performance pattern in… – Alex Krüger (@krugermacro) February 26, 2026

More importantly, both windows closely mirror Nasdaq performance, Kruger added, which means the so-called “10 a.m. dump” was a part of broad risk-asset repricing, not Jane Street foul play. A case of mistaken identity, if ever there was one.

Jane Street, it should be pointed out, isn’t a rogue operator with unfettered power over bitcoin, but a single player – an authorized participant (AP) – in a regulated ecosystem designed to ensure smooth trading of the ETFs. Hardly the stuff of villainy.

“No single firm sits at a terminal pressing ‘dump Bitcoin.’ But the structure itself-the ETF architecture, the AP exemptions, the shift to in-kind creation-creates a grey window where price discovery can be muted without anyone breaking rules,” Yale ReiSoleil, chief technology officer of Untrading, an Ethereum-based financial infrastructure firm, said on X. A grey window indeed, but one that hardly warrants pitchforks and torches.

Spot ETFs are funds that track bitcoin’s spot price while holding actual coins in custody. Their shares trade on the stock exchange and their prices tend to drift away from the underlying asset’s net asset value (NAV) depending on the demand and supply. A dance as old as time itself.

APs like Jane Street, JPMorgan and Citadel Securities are tasked with creating new ETF shares with demand spikes and redeem when demand falls to ensure the ETF price remains tethered to the NAV. A thankless task, no doubt.

In the case of bitcoin ETFs, APs are allowed “in-kind” creation and redemption, where they can swap a basket of actual BTC directly with the issuing company, rather than just cash. These dynamics, which are legal and not manipulation, could have led to 10 a.m. volatility. A perfectly reasonable explanation, if one cares to listen.

Short First, Buy Later

On a typical day, when BTC rises during the Asian and European hours, demand for ETFs spikes in early U.S. hours. This temporarily pushes the ETF price above its NAV. The APs then respond by increasing the supply of shares – sometimes by shorting shares they don’t have – to meet buyer demand and keep trading smooth. A delicate balancing act, to be sure.

Normally, shorting requires borrowing shares first, which costs money (like loan interest), but regulators have exempted APs from that rule. A privilege, perhaps, but hardly a crime.

Later, when they create new shares, they don’t rush to buy spot BTC right away and often source it privately through an over-the-counter shop. They then short futures or buy put options to hedge the long exposure from creating new shares. A strategy as old as the hills.

These things combined can inject temporary downside pressure in the market. But to call it manipulation is to stretch the truth thinner than a silk stocking.

“APs can short IBIT without borrowing costs, thanks to a Reg SHO carve-out. They can hedge that short with futures instead of spot. That means the natural arb that should close the gap between ETF price and NAV never happens, because the AP never buys spot,” ReiSoleil explained. A technicality, perhaps, but hardly a scandal.

“Meanwhile, in-kind creation lets them source bitcoin privately, OTC, at their own pace. The spot market never sees the buy pressure. The beginning looks like market-making. The end looks like market-making. The middle is where the integrity of price discovery goes to die,” he added. A dramatic turn of phrase, but one that overlooks the complexities of the system.

Kruger agreed that Jane Street conspiracy theories are typical of the doom-laden sentiment that often emerges after prolonged bitcoin downtrends. A sentiment as predictable as the seasons.

He firmly disagreed with the allegation that the “short first and buy later” mechanics employed by APs temporarily suppress the price.

“Whether the spot is bought by the AP or the basis trader, the net demand on BTC spot is identical,” he said, arguing that the notion that hedging with futures first (and delaying immediate spot buys) somehow compromises the integrity of price discovery is simply incorrect. A logical argument, if ever there was one.

Jane Street has not commented publicly, and no onchain data or exchange records have surfaced tying the firm to a coordinated campaign to push bitcoin lower. A silence that speaks volumes, perhaps, but hardly a confession.

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2026-02-26 15:08