The 10 a.m. enigma: The disappearance of bitcoin’s daily ‘price drop’ following a significant legal case.

Jane Street serves as a prominent authorized participant in spot bitcoin ETFs. This is not a conspiracy. However, the mechanisms that authorized participants engage in at the market’s opening shed light on aspects that many may overlook.

A popular theory circulating on X claims that trading firm Jane Street is consistently selling bitcoin around the 10 a.m. ET market opening to acquire spot ETFs at a reduced price. (CoinDesk)

What to know:

• Some crypto analysts on X have accused trading firm Jane Street of systematically offloading bitcoin around the 10 a.m. ET market opening to purchase spot ETFs at a discount, allegedly contributing to a price drop from $125,000 to $62,000.
• Market data referenced by experts, including crypto economist Alex Kruger, indicates no consistent dumping of bitcoin at 10 a.m. and instead implies that the fluctuations reflect broader Nasdaq risk repositioning rather than targeted actions by a single entity.
• Analysts assert that the trading behaviors are more accurately explained by the legal frameworks surrounding authorized participants in spot bitcoin ETFs, although detractors contend that these structures can still obscure spot price discovery, even in the absence of rule violations.

Bitcoin BTC$68,070.42 has consistently dropped each morning following the New York market’s opening since late 2025, and crypto enthusiasts on X are attributing this to Jane Street’s actions.

A theory on X has led retail investors to blame the firm for solely driving the asset down from $125,000 to $62,000 in recent months.

Nonetheless, market data and the operational details of an exchange-traded fund (ETF) authorized participant such as Jane Street indicate a different reality, observers have noted.

CoinDesk reached out to Jane Street for a statement regarding the BTC allegations but did not receive a response by European morning hours.

This is INSANE.

Since Jane Street was sued two days ago, the 10 AM manipulation has stopped.

Bitcoin is up 10%, adding $120 billion to its market cap, and the BTC weekly candle has turned green after 5 consecutive red candles.

The total crypto market has added nearly $200… pic.twitter.com/4dCrFewTE4

— Bull Theory (@BullTheoryio) February 25, 2026

The allegations

The assertion, proliferated through numerous viral posts, suggests that Jane Street, one of the largest trading firms globally, was routinely offloading bitcoin at 10 a.m. ET daily to depress prices before acquiring ETFs at lower rates.

“BTC has been consistently dropping approximately 2-3% within minutes of the U.S. cash market opening (10 a.m. ET) almost every trading day since early November. Many traders attribute Jane Street’s substantial $2.5B+ position in BlackRock’s IBIT as the likely catalyst: orchestrated liquidity sweeps to acquire spot ETFs at a discount,” Whale Factor, a well-known X account, stated in December.

The recent 13/F filings indicated that Jane Street held about $790 million in IBIT shares as of the fourth quarter of 2025.

Jan Happel and Yann Allemann, the co-founders of blockchain analytics firm Glassnode, have also documented these trends through their joint X account Negentropic and commented on Wednesday: “Jane Street Lawsuit gets made public, and miraculously the 10 a.m. $btc slam disappears.”

The accusations have intensified this week following a lawsuit against the firm by TerraForm Labs’ bankruptcy operator for insider trading that accelerated Terra’s collapse in 2022. Additionally, the 10 a.m. volatility has dissipated in the aftermath of the lawsuit. Bitcoin surged over 6% to nearly $70,000 on Wednesday.

would you look at that https://t.co/4TZJPJiI4c pic.twitter.com/AYZRZifp3x

— zerohedge (@zerohedge) February 25, 2026

In June of last year, India’s SEBI prohibited Jane Street from local markets and froze $566 million in purported illegal earnings, citing a “morning pump, afternoon dump” strategy manipulating the Bank Nifty index on 18 derivatives expiry days from January 2023 to March 2025. These allegations imply that Jane Street’s reputation precedes it.

Market data and logic suggest otherwise

The theory that Jane Street has been secretly lowering prices to acquire IBIT at a discount could be countered with data analyzed by crypto economist Alex Kruger, which does not substantiate the existence of a 10 a.m. dump.

The IBIT ETF has shown cumulative gains of around 0.9% within the 10:00-10:30 ET period; conversely, returns in the initial 15 minutes have been -1%, according to Kruger. This data lacks consistency and does not support a systematic dump, Kruger remarked on X.

Everyone says bitcoin dumps at 10AM every day.

I pulled the data, and it's not true.

Since Jan 1, IBIT's cumulative return in the 10:00–10:30 window is +0.9%, and in the 10:00–10:15 window it's –1%. Noisy, not a systematic dump.

More interesting: the performance pattern in… pic.twitter.com/jboe0eehG0

— Alex Krüger (@krugermacro) February 26, 2026

Furthermore, both timeframes closely align with Nasdaq performance, Kruger added, indicating that the alleged “10 a.m. dump” is part of a broader risk-asset repricing rather than the result of misconduct by Jane Street.

It should be emphasized that Jane Street is not a rogue entity with unchecked influence over bitcoin, but rather one player — an authorized participant (AP) — within a regulated ecosystem designed to facilitate efficient ETF trading.

“No single firm sits at a terminal pressing ‘dump Bitcoin.’ But the structure itself—the ETF architecture, the AP exemptions, the shift to in-kind creation—creates a grey window where price discovery can be muted without anyone breaking rules,” stated Yale ReiSoleil, chief technology officer of Untrading, an Ethereum-based financial infrastructure firm, on X.

Spot ETFs are funds that track the spot price of bitcoin while holding actual coins in custody. Their shares are traded on the stock exchange, and their prices may deviate from the underlying asset’s net asset value (NAV) depending on supply and demand dynamics.

Authorized participants such as Jane Street, JPMorgan, and Citadel Securities are responsible for creating new ETF shares in response to demand surges and redeeming shares when demand diminishes to keep the ETF price aligned with the NAV.

In the context of bitcoin ETFs, authorized participants have the ability for “in-kind” creation and redemption, allowing them to swap a basket of actual BTC directly with the issuing entity, rather than merely exchanging cash. These legal dynamics, which do not constitute manipulation, could account for the observed 10 a.m. volatility.

Short first, buy later

Typically, when BTC prices rise during the Asian and European trading hours, demand for ETFs increases during the early U.S. market hours. This temporarily elevates the ETF price above its NAV. Authorized participants then react by boosting the supply of shares — sometimes by shorting shares they do not possess — to satisfy buyer demand and maintain smooth trading.

Ordinarily, shorting necessitates borrowing shares in advance, which incurs costs (similar to loan interest); however, regulators have exempted authorized participants from this requirement.

Subsequently, when they create new shares, they do not immediately rush to purchase spot BTC and frequently obtain it privately through an over-the-counter shop. They then hedge the long exposure from creating new shares by shorting futures or buying put options.

These combined actions can exert temporary downward pressure on the market.

“Authorized participants can short IBIT without incurring borrowing costs, thanks to a Reg SHO carve-out. They can hedge that short with futures instead of spot. This means the natural arbitrage that should close the gap between ETF price and NAV does not occur because the authorized participant never buys spot,” ReiSoleil explained.

“Meanwhile, in-kind creation enables them to source bitcoin privately, OTC, at their own pace. The spot market does not witness the buy pressure. The initial phase looks like market-making. The concluding phase appears like market-making. The intermediate phase is where price discovery integrity deteriorates,” he added.

Kruger concurred that conspiracy theories surrounding Jane Street are characteristic of the pessimistic sentiment often arising after extended bitcoin downtrends.

He firmly disagreed with the assertion that the “short first and buy later” strategies employed by authorized participants temporarily suppress prices.

“Whether the spot is acquired by the authorized participant or the basis trader, the net demand for BTC spot remains unchanged,” he stated, arguing that the idea that hedging with futures first (and delaying immediate spot purchases) somehow undermines price discovery integrity is fundamentally flawed.

Jane Street has not made any public comments, and no on-chain data or exchange records have emerged linking the firm to a coordinated effort to depress bitcoin prices.