- The crypto community is going nuclear on Jane Street for its alleged Bitcoin pump-and-dump schemes.
- An industry expert called the narrative “ridiculous” because it doesn’t fit the firm’s business profile, and a market maker can’t single-handedly move BTC prices.
Jane Street, a company with a portfolio value of over $657 billion, is currently under fire from the crypto community for allegedly manipulating the Bitcoin (BTC) market. According to pseudonymous market watchers with large followings on social media, including Bull Theory and Marty Party, the trading firm has been consistently dumping BTC at the US market’s opening hour, around 10 AM (EST).
How Jane Street Orchestrates Its Bitcoin Manipulation Scheme
They claimed that Jane Street has been exhibiting the same pattern during the second and third quarters of this year. They stated that it’s always a clean wipeout at market opening, followed by a slow recovery. For them, it’s a classic high-frequency trading execution, which is something the company is known for.
Jane Street presumably pushes Bitcoin prices into liquidity pockets and re-enters the market at the dip. The crypto personalities noted that the firm repeats this daily, enabling it to accumulate billions of dollars’ worth of BTC.
They surmised that the recent Bitcoin dumps were due to manipulation rather than market weakness. Hence, the only way for the premier digital asset to resume its price climb is when big institutions like Jane Street are done buying it.
The crypto personalities noted that Jane Street conceals its move because it does not trade onchain. Instead, it utilizes spot BTC exchange-traded funds (ETFs) to hide its tracks. A commenter, however, argued that using ETFs that way would be tantamount to illegal stock market manipulation.
Why the Allegations Against Jane Street Don’t Make Sense
Anton Golub, Chief Business Officer of Freedx, called the rumors “ridiculous.” He said Jane Street is one of the biggest market makers in the world with billions of dollars in capital. It does not make sense that it would manipulate Bitcoin prices for its benefit.
Golub clarified that market makers generate money on spreads, arbitrage, and short-term price dislocations. Therefore, it’s not in the business of taking outright directional positions.
Furthermore, the Freedx senior executive remarked that it’s “delusional” to think that a market maker like Jane Street could move a liquid asset like Bitcoin on its own.
Jane Street notably holds significant investments in Bitcoin mining firms, namely Bitfarms, Cipher Mining, and Hut8.
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