How Wall Street Took Over Bitcoin

TL;DR

Bitcoin ETFs handed Jane Street — one of four authorized participants — the structural power to potentially manipulate Bitcoin's price while hiding their true positions.

Key Points

• 1.Jane Street's hidden power: As one of only 4 authorized participants for BlackRock's IBIT Bitcoin ETF, Jane Street can create/redeem shares, short-sell without normal restrictions, and hold undisclosed hedge positions — meaning a reported $800M long position could actually be net-zero or even bearish.
• 2.The 10AM pattern: From November 2025 onward, Bitcoin dropped 2–3% almost every trading day at exactly 10:00AM ET — during the lowest liquidity window — triggering forced liquidations and a self-reinforcing price spiral that lasted months.
• 3.The pattern stopped cold: The day a lawsuit against Jane Street became public, the 10AM drops ceased, Bitcoin surged 10%, $200B was added to the crypto market, and $213M in short positions were liquidated within 24 hours.
• 4.Caught doing the same thing in India: India's regulator SEBI found Jane Street guilty of a nearly identical "morning pump, afternoon dump" manipulation strategy, froze $566M of their funds, and banned them from trading in India entirely.
• 5.The Terra/Luna lawsuit: Jane Street is accused of using insider information from a former Terraform Labs employee to bet against Terra before someone dumped $85M of UST on May 7, 2022 — triggering the collapse that wiped out $40B and eventually took down FTX.
• 6.Self-custody is the only escape: Buying Bitcoin through ETFs means trusting the same financial system Bitcoin was built to replace; holding your own private keys means price manipulation cannot liquidate you or seize your coins.