Bitcoin investors have accused Jane Street Quantitative Trading of forcing the price down with its daily programmatic selling at US open. However, market analysts, data and market trends suggest this pattern is inconsistent and no company could force Bitcoin to a long-term bear market.
Online claims exploded a day following the court appointed administrator of Terraform Labs sued Jane StreetTerra’s algorithmic stabilitycoin ecosystem collapsed by May 2022, allegedly due to the insider trade allegations.
Justin Bechler and other market observers have argued Jane Street could be hiding a short Bitcoin position by using hedges not disclosed in public filings. Bechler claimed that Jane Street was manipulating Bitcoin by coordinating algorithmic sales at 10 am Eastern Standard Time every day.BTCPrice to purchase the ETF with a discounted price.
“When Jane Street reports holding $790 million in IBIT shares, the filing tells you nothing about whether those shares are hedged by puts, offset by short futures, or wrapped in a collar that makes the firm’s net Bitcoin exposure zero or even negative,” wrote Bechler added that the “actual position could be a massive short that looks like a long because the offsetting half of the trade is invisible under current disclosure rules.”
CryptoQuant’s Head of Research, Julio Moreno cautioned Bechler’s activity is not exclusive to one particular company. He explained that delta-neutral funds often buy spot exposure and sell futures to try to capture the spreads instead of directional movements.
Jane Street’s latest 13-F filing Also disclosed were significant positions in Bitfarms and Cipher Mining, along with Hut 8 and Hut 8’s Hut 8 Bitcoin mining company.
Claims focus on 10 a.m. Bitcoin dump
It is commonly believed that Bitcoin drops regularly just after 10 am Eastern Standard Time. That window coincides with US trading. Onchain analyst Nonzee posted Jane Street was alleged to have been the source of an hourly Bitcoin graph on Wednesday. “manipulating” The market was booming at the time.
Watch the crypto markets with Whale Factor claimed Bitcoin consistently registers a daily decline of 2% to 3 % minutes after US opens, which is attributed to programmatic manipulation. This has been ongoing since November.
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“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 #ETF’s at a discount,” Whale Factor, in an article published on X Dec. 9, said.
Macro analyst Alex Krüger disputed the framing, sharing blockchain data pointing to Bitcoin recording cumulative returns of 0.9% in the 10 a.m. to 10:30 a.m. window since Jan. 1, claiming it was not a “systemic dump.”
“Everyone says Bitcoin dumps at 10 AM every day. I pulled the data, and it’s not true,” wrote Krüger in a Thursday X post, adding that the ” 10 AM dump” Theory is an asset-risk repricing that follows the price performance on the Nasdaq Stock Index.
One company cannot drive the bear market, say analysts
Some market participants believe that even if some trading strategies increase volatility during the US opening, it’s unlikely for one company to dominate a market so deep and fragmented.
“Regardless of whether market manipulation has taken place, Bitcoin’s price isn’t driven by just one firm, no matter how influential. It isn’t a memecoin,” Nick Puckrin is the founder and chief market analyst of educational platform Coin Bureau.
“It’s understandable that investors with strong conviction in Bitcoin are looking for a villain during a major downturn. But the reality of Bitcoin market dynamics is much more nuanced.”
Puckrin believes that the recent Bitcoin weakness can be explained better by geopolitical uncertainties, liquidity issues in global markets and the growing artificial intelligence industry’s competition to attract investor attention.
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Source: cointelegraph.com
