How Wall Street Took Over Bitcoin

So there's a company that most people have never heard of, and it might be one of the most powerful trading companies on the planet. It's called Jane Street. The fact that they have become so large that even in a year that they have surpassed Bank of America and Citigroup at their trading desks in terms of revenue. And to give you an idea of how big they are, Jane Street has made more money from trading last year than Goldman Sachs, more than Citigroup, and more than Bank of America. In fact, they're estimated to be behind more than 10% of every stock trade in the United States. And they are one of only four companies in the world that are authorized to create and redeem shares of the biggest Bitcoin ETF in the world. This one, BlackRock's Bitcoin iBit ETF. Now, here's where things get really interesting because people have started noticing that there's this really weird price pattern in Bitcoin where Bitcoin would drop two to 3% at exactly 10 a.m. Eastern every single trading day for the past few months. And the theory says that this is because Jane Street is behind this manipulation. Because remember, this is also the same company that was banned from trading in India after regulators found them guilty of manipulating their stock market using a strategy that sounds almost identical to what they're now being accused of doing to Bitcoin. Now, one of our top stories, the Indian market regulator SEBI has barred US trading firm Jane Street from trading in the country's derivatives market. Now, on February 23rd, Jane Street was sued for allegedly using insider information to help trigger the collapse of a $40 billion crypto project called Terra, which also wiped out the savings of millions of people and set off a chain reaction that eventually took down FTX. And the moment that lawsuit became public, Bitcoin went up 10% in 48 hours and that 10 a.m. drop stopped completely. That's not even the crazy part though. The crazy part is that their co-founder wired $7 million, which was used to buy AK-47s, Stinger missiles and grenades for a coup attempt in South Sudan. This is verified information, which could all totally be a coincidence, but that's what I wanna help explain. This video is not just about Jane Street. This is a story about how the financial system controls the price of the one asset that was supposed to be outside of its control. So I wanna show you who has the power to move this capital and how the ability to control the capital flow might also affect Bitcoin's price. So with that said, let's get into it. Hi, my name is Andrei Jik. Hope you're doing well. Come for the finance and stay for the market manipulation. So here's how all of this sort of fits into the financial industrial complex that was made popular by Simon Dixon. And before I show you what Jane Street allegedly did to Bitcoin, I wanna explain who they are and what they do. Now, they were founded in 1999 and they're headquartered in Manhattan. They have about 3,000 employees, but the average employee makes about $1.4 million a year. Now, what makes them really interesting is that they don't really have a CEO. They're run by a management committee of about 30 to 40 people. Now, I'm assuming most people have never even heard of Jane Street. And that's because they have structured their company to be what's called a quantitative trading firm instead of a hedge fund. What does that mean? What that means is they don't have to tell the public what they do. Hold on, why? Well, it's because hedge funds have disclosure requirements. Banks have disclosure requirements. Jane Street does not, at least not in the same way. But what they do have is what people call control over the capital flow. Jane Street basically controls a lot of where money goes. And here's how. So when you buy Bitcoin through an ETF like this one here, iBit, you're not actually buying Bitcoin. You are buying a share of a fund that holds the Bitcoin. Now, in order for that system to work, someone has to be there in the middle of it all to make sure that the price of the ETF stays close relative to the price of the actual spot Bitcoin. That's what people in the industry call an authorized participant or an AP. Jane Street is one of only four APs for the biggest Bitcoin ETF in the world. Now, APs also get special privileges that no one else gets. For example, there's something called the rule of reg show, which is a rule for short selling stocks. For example, if you wanna bet against a stock, meaning you wanna profit when the price goes down, you would normally have to borrow the stock first. And that's just supposed to prevent people from selling the things they don't actually have. But authorized participants are exempt from parts of that rule. They're allowed to create and sell shares without the same restrictions. That's superpower number one. Now, their second superpower is that when Jane Street reports holding hundreds of millions of dollars in IBIT, those filings only show the long positions, meaning the shares they own. What they don't show is whether those shares are hedged by things like short positions, options, or derivatives. So for example, we could be looking at a filing that says, hey, Jane Street now owns $800 million worth of Bitcoin ETFs. And we might think, that's amazing. How bullish, right? They're betting on Bitcoin going up. But in reality, their actual exposure could be zero. It could even be negative, meaning they could be profiting from Bitcoin going down. And we would never know. This is because the system does not require them to disclose their options, futures, or swaps positions because they're an AP, an authorized participant. Now, if any of that was confusing, here's an easier way to think about this. Remember the happy birthday Pikachu card, right? Imagine the only way the public could invest in this was through a fund called the Pikachu ETF. The real card sits in a vault. There's only four companies in the world that are allowed to put new cards in and out of the vault and create or destroy the tickets that represent ownership of this card, right? That's the AP. Now, those four companies could tell you they own a bunch of Pikachu tickets. That's public information. What they don't have to tell you is whether they also placed a huge bet that Pikachu's value is gonna crash tomorrow. They could own the tickets and bet against them at the same time. And we would never see it. And if one of those four companies happened to be way bigger than the other three, and if it could move the price of Pikachu by selling a huge amount of tickets at a very specific time of day that no one's paying attention to, well, that's basically what people are accusing Jane Street of doing to Bitcoin. And let me show you exactly how this works. Starting around November, 2025, people started noticing something really weird about Bitcoin because every single trading day, Bitcoin would go down two to 3% right around 10 a.m. Eastern, right? That's when the stock market opens, by the way. That drop would trigger what are called liquidations, which is a fancy word for when people are forced to sell their Bitcoin because they borrowed money to buy it. And when the price didn't work out in their favor, they were forced to sell. Now, once those liquidations start, it creates a negative feedback loop because the price goes down, more people get liquidated, which makes the price go down more, which forces more liquidations, right? You get the idea. And this was happening almost every single day. So people started noticing that this happened dozens of times in a row. There was a viral thread on Twitter about this, and it showed that the drops were happening at the same time in the same way during the lowest liquidity windows of the day. What does that mean? Low liquidity window means when a relatively small amount of selling can move the price of something by a lot. Now, if you're just a normal person watching all this, to us, it just looks like, oh, well, I guess the market went down today. That kind of sucks, right? I guess we're in a bear market. But the theory is, if you're the one that's causing the drop and you've positioned yourself to profit from it ahead of time, this could definitely make you a lot of money. And here's how someone might be able to do this, allegedly. Step one, you buy spot Bitcoin, right? Let's say it's at $68,000. Okay, cool. Step two, on a separate exchange or through derivatives, you open huge short positions, meaning you'd bet on Bitcoin going down. Step three, you sell a huge amount of Bitcoin very fast right at 10 a.m. using algorithms during this low liquidity window, which triggers panic selling and liquidations. Step four, the price crashes to let's say $62,000. Now you do lose money on the Bitcoin you sell, maybe 5%, but the profits on the short position is way bigger than that 5% loss. Step five, you close out the shorts for a huge profit. And for extra credit, step six, you buy spot Bitcoin again at $62,000, which is way cheaper than where you sold some of it. That buying pressure pushes the price back up, triggers a short squeeze, FOMO from other buyers and investors who think, hey, maybe Bitcoin's gonna go up again and finally recover. And then you do it all over again, right? Huge shorts again at the new higher price, rinse and repeat. And that's how you get potentially months and months of sideways price movement where Bitcoin just kind of sits there and does nothing. Now, obviously all of this sounds like a huge accusation, and it is, but here's what makes all of this kind of plausible. The moment that the lawsuit that was filed against Jane Street became public, this pattern stopped. Bitcoin went up 10%, $200 billion was added to the crypto market, short liquidations hit $213 million in 24 hours, and BlackRock's IBIT ETF saw a $250 million inflow in just one day, which may or may not have ended the five weeks of outflows, totaling billions and billions of dollars. That is all a huge, huge coincidence. Now, I do wanna be fair because not everyone believes this theory. There is an analyst named Alex Kruger who looked at the data and said, Bitcoin does dip around 10 a.m., but by 1030, it's usually recovered. So it's not really a dump. It's more like a repricing that happens when the U.S. market opens and new information enters the market, which makes perfect sense. There's another researcher there who's the head of research at Cryptoquant, and he says that what people are describing, buying spot Bitcoin and selling futures against it, is just what a delta-neutral fund might do. What's a delta-neutral fund? A delta-neutral fund is a fund that does not necessarily care about the underlying investment, right? It's just a fund that's designed to make money regardless of whether the price goes up or down. So it's not manipulation. It's a trading strategy, and it's not even unique to Jane Street. And I also think that's a reasonable argument to consider. Now, if this was the only piece of evidence we had, I'd probably just leave it here and say, okay, maybe this is just how normal things work in the market. But this is not the only evidence, because in July of 2025, India's securities regulator, it's called SEBI, S-E-B-I. It's basically India's version of the SEC. They investigated Jane Street and found them guilty of manipulating India's stock market. And the strategy they described was almost identical. They called it morning pump, afternoon dump. Jane Street would push prices up in the morning using one set of trades and then reverse those positions in the afternoon to profit from the drop. The regulator said it was a coordinated strategy that exploited predictable price movements that Jane Street itself was creating. Now, as a result of their findings, they froze $566 million of Jane Street's money and they banned the company from trading in India. This was not a rumor. This is verified. And India was not even the only market. China has caught several Jane Street accounts of allegedly manipulating silver prices through their ETFs because Jane Street is a massive holder of silver ETFs. So I think we need to consider all of these options because they were literally caught manipulating the prices in almost the exact same way in other countries and they haven't denied it. Now that brings us to the lawsuit. This is what sort of made everyone notice all of this because believe it or not, the lawsuit itself is not even about the Bitcoin dump at 10 a.m. The lawsuit is about something that happened three years ago over a $40 billion project, which you may or may not remember. So in 2022, there was a crypto project called Terra. Terra had two tokens. One that was called Luna and one that was called UST, which was a stable coin, which remember is always supposed to be pegged to the dollar one-to-one. Basically, the system would automatically create and destroy Luna tokens to keep UST pegged to $1. And as long as people believe in the system, then it works out. And at its peak, Terra's ecosystem was worth about $40 billion. Now, where it gets interesting is that according to the lawsuit, there was a former intern at Terraform Labs, the company behind Terra, who left and got hired by Jane Street. And while this person was at Terraform, they allegedly had access to confidential information about how Terra actually worked. And when they moved to Jane Street, they allegedly brought that information with them. The lawsuit says that this person was part of a private group chat where former Terraform insiders shared non-public information about the project. And Jane Street allegedly then used that information to build a trading strategy around Terra's collapse. Because on May 7th, 2022, somebody dumped $85 million worth of UST on a decentralized exchange called Curve. Curve uses something called liquidity pools where UST was paired with other stable coins. Now, when $85 million of UST got dumped into the pool all at the same time, it overwhelmed the system, right? UST started losing its peg. It went from $1 to 99 cents to 98 to 95. And remember, the algorithm tries to fix this by creating more Luna tokens. But more Luna means Luna's price goes down, which makes them sell more UST, which creates more Luna, which crashes Luna more. It's more or less the same type of spiral that we talked about with the Bitcoin liquidation, except this one destroyed the whole Terra ecosystem in about 72 hours. Luna went from $80 to essentially zero. UST went from $1 to zero. 40 billion just lost, right? People lost their life savings. And according to the lawsuit, Jane Street knew this was gonna happen because they had inside information from this former employee of the project. And they positioned themselves to profit from the collapse before it started. That's the lawsuit in a nutshell. Now, I wanna be clear that Jane Street has not responded to these allegations yet, but that's what the lawsuit claims. But the reason that this is important to our Bitcoin story is that if these allegations are true, that means Jane Street has a pattern of doing this. Now, maybe India was a one-time thing, but they also have their fingerprints on China, on Terra, and now maybe on Bitcoin. By the way, everything I've told you up to this point isn't even the craziest thing that's connected to Jane Street. One of the co-founders of the company, who's also named in this lawsuit, wired $7 million that was used to buy AK-47s, missiles, and grenades for a coup attempt in South Sudan. This was verified by the Department of Justice. Also, Sam Bankman freed from FTX. He worked at Jane Street before he started FTX. So did several of his future colleagues. Now, maybe all of this is just a coincidence, but the older I get, the less I'm starting to believe in those. Now, the real takeaway of this video for me is that this story is not really about Jane Street. Jane Street might be doing everything they're accused of. Maybe they're not. The lawsuit's gonna play out. The evidence will come out. What I think is the most interesting part is the system that makes all of this possible. Because Bitcoin was created to be outside of the financial system. That was the whole point. But the moment Bitcoin got securitized, when it got its ETF, it got its authorized participant. And the moment it got the authorized participant, it got a middleman with special privileges who could create and destroy shares, who might be able to hedge in ways that no one else can see, and who might be able to move the price during low liquidity windows. This is how the financial industrial complex system is designed. And I think the takeaway here is not, don't buy Bitcoin because someone manipulates the price. Bitcoin's one of the most important assets of my generation, and it'll always be under attack. The takeaway for me is that, be careful of how you're buying Bitcoin. Because if you're buying Bitcoin through an ETF, that's fine, but you're trusting the system that Bitcoin was designed to replace. But if you're holding your own keys in your own wallet, none of this can affect you. The price might move, but no one can take your Bitcoin. No one can liquidate you. That's what not your keys, not your Bitcoin means. That's the whole point of self-custody, which is also why I made an instructional guide on how to do that for beginners. It's almost four hours long. You can use coupon code Andre40 to get a 40% discount. But my hope is that somewhere along your Bitcoin journey, you'll learn how to self-custody because Bitcoin only works as honest money if the system that it's a part of is also somewhat honest and transparent. And as of now, I think we've learned that it very much is not. Hopefully it will be in the future. But as a Bitcoiner, I don't wanna wait for their permission and I don't wanna trust. I wanna verify. Now, I'd love to hear your thoughts in the comments below on what you think happened. Smash the like button, subscribe if you haven't already. I'd love to see you back here next week. I'll see you soon. Bye-bye.