Bitcoin’s recent decline has taken many enthusiasts by surprise, with the cryptocurrency plummeting over 40% since hitting a staggering peak above $120,000 in October 2025. As holders search for explanations for this significant downturn, a viral theory has emerged on social media, particularly within the Crypto Twitter community. This theory accuses the well-known trading firm Jane Street of secretly manipulating Bitcoin’s prices, particularly in relation to its role in Bitcoin exchange-traded funds (ETFs).
The speculation intensified this week when traders observed a concerning trend: Bitcoin’s price seemed to dip consistently every morning around 10 a.m. Eastern Time. This rhythmic decline has led many to finger Jane Street as the culprit. According to the accusations, the firm is allegedly exploiting its position as an “authorized participant” for various major Bitcoin ETFs, such as those offered by BlackRock and Fidelity. In this role, authorized participants are responsible for maintaining the alignment between the ETF prices and the actual market price of Bitcoin by creating and redeeming shares, ultimately profiting from price discrepancies.
Rumors suggest that Jane Street has been selling off Bitcoin each morning to drive prices down, from which they could then profit or perhaps even bet against the asset in alternative ways. The theory garnered further traction when Bitcoin experienced a midweek rally, with some users claiming Jane Street ceased this alleged manipulation in response to public scrutiny.
Compounding these rumors is Jane Street’s history, including controversies surrounding a past lawsuit from Terraform Labs. This lawsuit accused the firm of insider trading related to the 2022 collapse of TerraUSD, which resulted in the loss of billions. Jane Street has dismissed these allegations as “baseless” and opportunistic, attributing the collapse to misdeeds by Terraform’s founder Do Kwon.
Notably, industry experts, such as Rob Hadick from Dragonfly Capital, have publicly rebuffed the manipulation claims against Jane Street. Hadick remarked that the arguments put forth by accusers reflect a fundamental misunderstanding of derivatives and the functions of authorized participants in ETFs.
The firm’s enigmatic aura has only added to the speculation, especially given its past connection to disgraced figures like Sam Bankman-Fried and Caroline Ellison, who were both linked to the major collapse of the FTX exchange. The secretive and lucrative trading style characteristic of Jane Street may also contribute to the envy and suspicion it faces from crypto competitors.
In light of Jane Street’s alleged role, observers have been keeping a keen eye on broader trends within the cryptocurrency landscape, notably highlighting various scandals that have recently emerged. For instance, a Chinese national received a prison sentence in January for laundering $37 million from American victims via Southeast Asian scams. In Florida, police apprehended cryptocurrency CEO Christopher Delgado in connection with a Ponzi scheme valued at $328 million through Goliath Ventures. Furthermore, Paxful Holdings was recently fined $4 million for facilitating activities linked to money laundering and fraud.
Warnings about ongoing scams, particularly those targeting older adults, have circulated widely. Authorities have flagged threats ranging from romance scams to fake investment applications that siphon off savings from unsuspecting individuals. In Denton County, law enforcement has warned residents of impostors posing as deputies pressuring them to pay Bitcoin for fictitious “jury duty” warrants.
Despite the vivid discussions surrounding Jane Street’s alleged manipulation of Bitcoin, there remains no verified evidence supporting these claims. As the cryptocurrency world continues to navigate these controversies, observers will remain vigilant in monitoring new developments and the evolving dynamics of this volatile market.
