"The unfounded claims that Jane Street manipulated the price of Bitcoin revolve around the firm's role as an "authorized participant" in the relatively new market for crypto ETFs offered by BlackRock and others. So-called "APs", which are an integral part of the ETF landscape, are deep-pocketed firms that help ensure that the price of ETF shares track the value of the assets they hold, allowing the firms to earn money from arbitrage by doing so."
"The specific accusations vary, but most allege some version of Jane Street dumping Bitcoin holdings at a given time every morning, while holding short positions to benefit from the resulting dip. There is no firm evidence to support this theory, however, and veteran market watchers have put little stock in it."
"The claims, however, appear to be flimsy at best in the eyes of Wall Street veterans. They were also dismissed by a person close to Jane Street, who was not authorized to speak for attribution but described the claims as an "absolutely ridiculous" conspiracy theory."
Bitcoin prices fell over 40% since October without clear explanation, prompting Crypto Twitter to blame Jane Street, a Wall Street firm serving as an authorized participant in crypto ETFs. The theory alleged Jane Street systematically depressed Bitcoin prices through coordinated trading and short positions. A midweek Bitcoin rally fueled claims the firm changed behavior after exposure. However, Wall Street veterans and a Jane Street representative dismissed the allegations as baseless conspiracy theories. Authorized participants like Jane Street facilitate ETF price tracking through arbitrage, but no evidence supports claims of market manipulation.
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