Bitwise CIO Matt Hougan has dismissed claims linking trading firm Jane Street to Bitcoin’s recent decline, calling the downturn a classic market cycle. He and other analysts pointed to leverage unwinding and non-U.S. trading hours as primary drivers, countering viral conspiracy theories about coordinated selling. The debate has nevertheless revived questions about the structural mechanics of spot Bitcoin ETFs.
Bitwise Chief Investment Officer Matt Hougan has pushed back on claims that trading firm Jane Street is behind Bitcoin’s recent slide. He wrote that the downturn is a “classic crypto winter,” not a coordinated attack.
Speculation intensified after a lawsuit accused Jane Street of using insider information before the 2022 Terra-Luna collapse. The firm has denied the allegations and blamed Terraform’s management for the $40 billion failure.
Some crypto analysts also alleged that Jane Street runs a specific sell algorithm to push Bitcoin lower. They pointed to an ongoing regulatory case in India accusing Jane Street entities of index manipulation.
Hougan dismissed these narratives as misplaced conspiracy theories. “The conspiracy theories are wild,” he wrote.
He amplified analysis showing Bitcoin’s pronounced weakness has occurred around midnight ET, not during alleged U.S. market attacks. This data pointed to non-U.S. trading hours as a key vulnerability period.
Macro strategist Alex Krüger also called the Jane Street theory “yet another viral and flawed conspiracy theory.” He noted that authorized participants simply close gaps between ETFs, futures, and spot markets.
The controversy has revived debate about how authorized participants operate within ETF structures. Some critics argue their hedging strategies could potentially dull direct spot Bitcoin demand.
None of the current lawsuits establish coordinated misconduct in Bitcoin markets. The overlap between quantitative firms and ETF mechanics, however, has fueled suspicion during the downturn.
For Hougan, traditional market cycles are a sufficient explanation. “This is a classic crypto winter and there will be a classic crypto spring,” he wrote.
