Bitwise CIO Matt Hougan Rejects Jane Street Blame for Bitcoin Dip

Matt Hougan, chief funding officer at Bitwise, has pushed again on claims that buying and selling agency Jane Street is behind Bitcoin’s current slide, writing on X on February 26 that the downturn is “a basic crypto winter,” not a coordinated assault.

His feedback come as lawsuits and viral threads revive previous fears about market manipulation simply as Bitcoin is buying and selling over 46% under its all-time high.

Conspiracy Claims Collide With ETF Mechanics

Speculation intensified after experiences emerged that Terraform Labs’ chapter administrator had sued Jane Street in a Manhattan federal court docket, accusing the agency of utilizing insider info earlier than the May 2022 Terra-Luna collapse.

According to the criticism, Jane Street withdrew 85 million TerraUSD from Curve’s 3pool minutes after Terraform eliminated 150 million UST, a sequence the swimsuit claims accelerated the $40 billion collapse. Jane Street has denied the allegations, calling the case a “determined try” to get well losses and blaming Terraform’s administration for the failure.

At the identical time, some crypto analysts, together with Bull Theory, alleged that Jane Street runs a “10 AM” promote algorithm to push Bitcoin decrease and revenue from derivatives.

Bull Theory additionally 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 1000’s of crores in illegal good points. The case is ongoing, and the agency has appealed.

However, Hougan dismissed the narrative as misplaced. “The conspiracy theories are wild,” he wrote, arguing that Bitcoin is down as a result of traders unwound lengthy positions, diminished leverage, and rotated capital elsewhere.

The Bitwise CIO additionally amplified colleague André Dragosch’s evaluation of intraday Bitcoin efficiency for the reason that ETF launch in January 2024. Dragosch’s information countered the viral 10 AM slam narrative by exhibiting pronounced weak spot round midnight ET, pointing to non-U.S. buying and selling hours because the precise vulnerability interval.

Macro strategist Alex Krüger additionally echoed Hougan’s skepticism, calling the Jane Street concept “one more viral and flawed conspiracy concept.” He famous that foundation merchants and licensed members (APs) merely shut gaps between ETFs, futures, and spot markets.

“Too many doomer narratives and conspiracy theories trying for villains circulating proper now,” Krüger posted. “Historically, that’s the form of sentiment you see at bottoms.”

Structural Questions Linger Beyond the Blame

The controversy has additionally revived debate about ETF plumbing. ProCap CIO Jeff Park wrote on February 25 that issues are much less a couple of single agency and extra about how APs function below regulatory exemptions that permit in-kind creations and redemptions.

In concept, APs can hedge ETF publicity with futures as an alternative of shopping for spot Bitcoin instantly, which critics argue might boring spot demand.

None of the lawsuits or regulatory filings to date set up coordinated misconduct in Bitcoin markets. Still, the overlap between massive quantitative corporations, derivatives methods, and ETF mechanics has fueled suspicion throughout a downturn.

For Hougan, the reason is less complicated. Bitcoin’s four-year cycle, leverage resets, and shifting investor priorities are sufficient to clarify the pullback.

“This is a basic crypto winter and there will likely be a basic crypto spring,” he wrote. “People need somebody responsible — I get it — however the actuality is much extra boring than that.”

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