Was Jane Street behind the bitcoin crash? A deep dive into why that theory may not not hold
The theory that Jane Street caused a daily 'price slam' in Bitcoin is questioned, with market data suggesting the volatility is linked to ETF mechanics and broader market trends.Summary
A popular theory accused Jane Street, a major authorized participant in spot Bitcoin ETFs, of systematically selling Bitcoin at 10 a.m. ET to lower prices and acquire ETFs cheaply. This claim gained traction after a lawsuit against Jane Street coincided with the disappearance of the daily price drop and a Bitcoin price surge. However, market data analyzed by crypto economists like Alex Kruger doesn’t support the theory, showing that ETF returns during the alleged 'slam' period closely mirror Nasdaq performance, indicating broader market repricing. Experts explain that the ETF structure, particularly the 'in-kind' creation and redemption process, and the regulatory exemptions granted to authorized participants, can create temporary price volatility without any illicit activity. While APs may short ETF shares and hedge with futures rather than immediately buying spot Bitcoin, this doesn't necessarily suppress prices, as the net demand remains the same. No on-chain data or exchange records have confirmed Jane Street's involvement in manipulating the Bitcoin price.
(Source：CoinDesk)