The 10 a.m. Drop: Jane Street, Terra, and the Bitcoin Suppression Machine

The Terraform Lawsuit: “Bryce’s Secret” and a 10-Minute Head Start

This week, Terraform Labs’ wind-down administrator Todd Snyder filed suit in Manhattan federal court alleging Jane Street engaged in insider trading that “hastened” Terraform’s collapse. The complaint centers on an intern-turned-employee, Bryce Pratt, who worked at Terraform before joining Jane Street full-time in September 2021, and a private chat group described in filings as “Bryce’s Secret.” Snyder alleges the channel gave Jane Street access to material nonpublic information about Terraform’s liquidity operations—exactly the kind of information that matters when a stablecoin’s peg depends on confidence and liquidity.

The critical factual allegation involves May 7, 2022. Terraform withdrew $150 million in TerraUSD (UST) from Curve’s 3pool, a key liquidity venue. Moments later—within about 10 minutes, according to reporting on the suit—a wallet allegedly linked to Jane Street withdrew or swapped roughly $85 million UST from the same pool before the move was publicly known. The lawsuit claims Jane Street used this timing edge to unwind risk “at precisely the right time, mere hours before the Terraform ecosystem collapsed,” and that the trades “would have been impossible” without the inside information alleged.

Jane Street denies wrongdoing. A spokesperson called the suit “desperate” and “baseless,” framing it as an attempt to extract money to cover losses driven by Terraform’s own conduct. Whatever the outcome, the filing matters because it puts Jane Street—normally the invisible plumbing of markets—directly in the storyline of one of crypto’s most destructive failures, a collapse that wiped out roughly $40 billion in value and helped trigger the broader 2022 crypto winter.

Jane Street was behind the 2022 crypto winter, alleged Zerohedge, destroying Terraform by first depegging the token and destroying the ecosystem

From Terra to Bitcoin: Where Facts End and Suspicion Begins

The lawsuit does not accuse Jane Street of manipulating Bitcoin. But it changes the way market participants interpret what they think they’re seeing in Bitcoin’s tape. Beginning in late 2024 and recurring through parts of 2025, traders fixated on abrupt sell-offs clustering around the U.S. cash-market open—often described online as “10 a.m. drops.” The hard evidence here is weaker than the Terraform case: most of it is chart-based pattern recognition, social media claims, and post-hoc explanation. Even so, time-of-day effects around the U.S. open are plausible in a world where crypto trades 24/7 but global risk is still priced around U.S. hours, and where ETF hedging and derivatives positioning can concentrate flows into specific windows.

This tweet from December shows Bitcoin consistently dumping ~2-3% within minutes of the US cash open (10 a.m. ET) almost every trading day since early November, source: X

The leap—where the story becomes speculation—is the claim that a single firm is systematically engineering those moves to harvest liquidations and re-enter lower. That allegation is not proven in court, not backed by disclosed trade-level attribution, and not confirmed by regulators. But it has a logic that is easy to sell: if you can push price down into thin liquidity at a predictable moment, you can trigger leveraged liquidations that amplify the move, then profit from the volatility and the rebound.

The ETF “Pipe”: How Jane Street Became a Suspect by Default

The reason Jane Street is always named in these theories is structural, not emotional. In spot Bitcoin ETFs, the key actors aren’t the loud retail accounts on X—it’s the authorized participants and market makers who sit closest to the creation/redemption mechanism and the hedging stack above it. Jane Street is widely cited as a major liquidity provider in ETF markets, and it disclosed a very large stake in BlackRock’s iShares Bitcoin Trust (IBIT) in its Q4 2025 13F filing: about 20.3 million shares valued around $790 million, after adding roughly 7.1 million shares in the quarter (about $276 million by the values circulating in coverage).

To the public, that read as “Jane Street is bullish.” To market-structure people, it read as “Jane Street is holding inventory.” And inventory is not a directional bet—especially because a 13F is a snapshot of certain long positions and does not reveal the full hedge book. That’s why former hedge fund manager Michael Green called the bullish interpretation “painful,” arguing the IBIT position is likely “almost entirely offset” by undisclosed options and futures positions—“that’s how market making works.” Another market participant, former prop trader Ryan Scott, was even more direct: anyone posting it as bullish, he said, is ignoring “offsetting derivative positioning that does not need to be reported.” And Nik Bhatia reduced it to incentives: firms hold ETF shares so they can write options, arbitrage, and run the quantitative playbook—not because they’re “stacking sats” like a retail maxi.

This is the core of the “invisible book” argument: Jane Street can appear massively long in a disclosure while being net-flat or even net-short after options, futures, and swaps. That doesn’t prove suppression. It does explain why a firm might simultaneously hold a large ETF position and still benefit from downside volatility or drawdowns, depending on the hedge structure.

The Precedent: A Regulator Has Already Accused Jane Street of Manipulation Elsewhere

Suspicion thrives on precedent, and Jane Street has one. In July 2025, India’s securities regulator SEBI issued an interim order accusing Jane Street-linked entities of manipulating the Bank Nifty index using coordinated activity across cash and derivatives markets, imposing restrictions and other measures. Reuters reported SEBI’s theory as a classic cross-market strategy: support the index with trades in constituents while holding large options positions, profit in the derivative layer, then reverse. Jane Street disputed the findings and said it would respond and could appeal.

This matters for the Bitcoin narrative because it makes the “could they do something similar?” question feel less like paranoia. But it’s still a different market, a different regulator, and—crucially—an allegation still being contested. It raises the temperature; it doesn’t close the case.

What We Can Say Cleanly: Evidence, Speculation, and the Real Risk

What’s true and documented right now is straightforward: Terraform’s administrator has sued Jane Street in U.S. federal court over alleged insider trading tied to the Terra collapse, pointing to a private chat group and rapid trading around a key liquidity withdrawal, and Jane Street says the claims are baseless. It’s also true that Jane Street disclosed a large IBIT position in a 13F, and that such filings do not reveal the full derivatives hedge book that determines net exposure. It’s true that a major regulator has accused Jane Street-linked entities of cross-market manipulation in India, which the firm disputes.

What remains speculative is that Jane Street ran a systematic “10 a.m.” Bitcoin sell program to suppress price through late 2025 and that the firm’s ETF role enabled it to engineer liquidation cascades at will. That theory has a coherent mechanism, but the public record does not yet provide trade attribution, internal communications, or regulatory findings that prove intent.

What is clear however, is that when the Jane Street theory went public, suddenly the pressure came off Bitcoin and it jumped 7% overnight, source: BNC

The real risk for Bitcoin holders isn’t that “one firm decides the price.” It’s that ETF-era Bitcoin is now intertwined with professional market-making, leverage, and opaque hedging structures that can make price discovery look unnatural even when it’s “just” high-speed inventory management. The uncomfortable truth is that the protocol may be decentralized, but the most influential pipes around it—the ones that connect spot, ETFs, options, and funding markets—are operated by firms whose edge is extracting profit from structure. And that’s why every new legal allegation against a firm like Jane Street instantly metastasizes into a theory about Bitcoin itself. Was Jane Street manipulating the price of Bitcoin? Stay tuned folks.