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\n\t\t\t\t\t\t\t\t\tMatt Hougan dismissed claims that Jane Street is orchestrating Bitcoin\u2019s recent decline, calling the downturn \u201ca classic crypto winter.\u201d\t\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n
Matt Hougan, chief investment officer at Bitwise, has pushed back on claims that trading firm Jane Street is behind Bitcoin\u2019s recent slide, writing on X on February 26 that the downturn is \u201ca classic crypto winter,\u201d not a coordinated attack.<\/p>\n
His comments come as lawsuits and viral threads revive old fears about market manipulation just as Bitcoin is trading over 46% below its all-time high.<\/p>\n
Speculation intensified after reports emerged that Terraform Labs\u2019 bankruptcy administrator had sued<\/a> Jane Street in a Manhattan federal court, accusing the firm of using insider information before the May 2022 Terra-Luna collapse.<\/p>\n According to the complaint, Jane Street withdrew 85 million TerraUSD from Curve\u2019s 3pool minutes after Terraform removed 150 million UST, a sequence the suit claims accelerated the $40 billion collapse. Jane Street has denied the allegations, calling the case a \u201cdesperate attempt\u201d to recover losses and blaming Terraform\u2019s management for the failure.<\/p>\n At the same time, some crypto analysts, including Bull Theory, alleged<\/a> that Jane Street runs a \u201c10 AM\u201d sell algorithm to push Bitcoin lower and profit from derivatives.<\/p>\n Bull Theory also pointed to an interim order from India\u2019s Securities and Exchange Board accusing Jane Street entities of expiry-day index manipulation between January 2023 and March 2025, alleging thousands of crores in unlawful gains. The case is ongoing, and the firm has appealed.<\/p>\n However, Hougan dismissed<\/a> the narrative as misplaced. \u201cThe conspiracy theories are wild,\u201d he wrote, arguing that Bitcoin is down because investors unwound long positions, reduced leverage, and rotated capital elsewhere.<\/p>\n The Bitwise CIO also amplified<\/a> colleague Andr\u00e9 Dragosch\u2019s analysis of intraday Bitcoin performance since the ETF launch in January 2024. Dragosch\u2019s data countered the viral 10 AM slam narrative by showing pronounced weakness around midnight ET, pointing to non-U.S. trading hours as the actual vulnerability period.<\/p>\n Macro strategist Alex Kr\u00fcger also echoed Hougan\u2019s skepticism, calling<\/a> the Jane Street theory \u201cyet another viral and flawed conspiracy theory.\u201d He noted that basis traders and authorized participants (APs) simply close gaps between ETFs, futures, and spot markets.<\/p>\n \u201cToo many doomer narratives and conspiracy theories looking for villains circulating right now,\u201d Kr\u00fcger posted. \u201cHistorically, that\u2019s the kind of sentiment you see at bottoms.\u201d<\/p>\n<\/blockquote>\n The controversy has also revived debate about ETF plumbing. ProCap CIO Jeff Park wrote<\/a> on February 25 that concerns are less about a single firm and more about how APs operate under regulatory exemptions that allow in-kind creations and redemptions.<\/p>\n In theory, APs can hedge ETF exposure with futures instead of buying spot Bitcoin directly, which critics argue could dull spot demand.<\/p>\n None of the lawsuits or regulatory filings so far establish coordinated misconduct in Bitcoin markets. Still, the overlap between large quantitative firms, derivatives strategies, and ETF mechanics has fueled suspicion during a downturn.<\/p>\n For Hougan, the explanation is simpler. Bitcoin\u2019s four-year cycle, leverage resets, and shifting investor priorities are enough to explain the pullback.<\/p>\n \u201cThis is a classic crypto winter and there will be a classic crypto spring,\u201d he wrote. \u201cPeople want someone to blame \u2014 I get it \u2014 but the reality is far more boring than that.\u201d<\/p>\n<\/blockquote>\n LIMITED OFFER for CryptoPotato readers at Bybit: Use this link<\/a> to register and open a $500 FREE position on any coin!<\/b><\/p>\n<\/div>\n<\/div>\nYou may also like:<\/h3>\n
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Structural Questions Linger Beyond the Blame<\/h2>\n
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