Matt Hougan, chief investment officer at Bitwise, has pushed back on claims that trading firm Jane Street is behind Bitcoin’s recent slide, writing on X on February 26 that the downturn is “a classic crypto winter,” not a coordinated attack.
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.
Conspiracy Claims Collide With ETF Mechanics
Speculation intensified after reports emerged that Terraform Labs’ bankruptcy administrator had sued Jane Street in a Manhattan federal court, accusing the firm of using insider information before the May 2022 Terra-Luna collapse.
According to the complaint, Jane Street withdrew 85 million TerraUSD from Curve’s 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 “desperate attempt” to recover losses and blaming Terraform’s management for the failure.
At the same time, some crypto analysts, including Bull Theory, alleged that Jane Street runs a “10 AM” sell algorithm to push Bitcoin lower and profit from derivatives.
Bull Theory also pointed to an interim order from India’s 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.
However, Hougan dismissed the narrative as misplaced. “The conspiracy theories are wild,” he wrote, arguing that Bitcoin is down because investors unwound long positions, reduced leverage, and rotated capital elsewhere.
The Bitwise CIO also amplified colleague André Dragosch’s analysis of intraday Bitcoin performance since the ETF launch in January 2024. Dragosch’s 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.
Macro strategist Alex Krüger also echoed Hougan’s skepticism, calling the Jane Street theory “yet another viral and flawed conspiracy theory.” He noted that basis traders and authorized participants (APs) simply close gaps between ETFs, futures, and spot markets.
“Too many doomer narratives and conspiracy theories looking for villains circulating right now,” Krüger posted. “Historically, that’s the kind of sentiment you see at bottoms.”
Structural Questions Linger Beyond the Blame
The controversy has also revived debate about ETF plumbing. ProCap CIO Jeff Park wrote 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.
In theory, APs can hedge ETF exposure with futures instead of buying spot Bitcoin directly, which critics argue could dull spot demand.
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.
For Hougan, the explanation is simpler. Bitcoin’s four-year cycle, leverage resets, and shifting investor priorities are enough to explain the pullback.
“This is a classic crypto winter and there will be a classic crypto spring,” he wrote. “People want someone to blame — I get it — but the reality is far more boring than that.”
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