Is Jane Street Why Bitcoin Isn’t At $150K? Expert | Crypto News
The thought that Jane Street is single-handedly the explanation why Bitcoin isn’t trading at $150,000 is the improper body, according to ProCap CIO and Bitwise advisor Jeff Park. In a X thread February 25, Park argued that the real issue isn’t one firm, but a structural function of the US spot Bitcoin ETF system that provides all approved members uncommon flexibility in how they hedge and settle trades.
Is Jane Street Suppressing Bitcoin?
Park’s core level is that the market has turned a query about Jane Street into a query about the ETF plumbing itself. On IBIT alone, he famous, the approved participant roster contains Jane Street Capital, JPMorgan, Macquarie, Virtu Americas, Goldman Sachs, Citadel Securities, Citigroup, UBS and ABN AMRO. In his telling, that issues because APs will not be unusual short sellers.
“The question deserves a precise answer—and the most important thing to understand upfront is that it is not really a question about Jane Street,” Park wrote. “It is a question about a structural feature of the Bitcoin ETF architecture that applies equally to every Authorized Participant in the ecosystem.” He added that the function of those establishments is “genuinely misunderstood, even amongst seasoned industry veterans.”
The mechanism Park centered on is the AP exemption under Regulation SHO. In normal short promoting, merchants typically need to find shares before shorting and face borrowing prices that create stress to close the commerce. APs, Park argued, sit in a different class because their creation and redemption rights successfully allow them to manufacture ETF shares without those same frictions.
“The practical consequence is significant: any AP can manufacture shares at will—no borrow cost, no capital conventionally tied up against the short, and no hard deadline to close the position beyond what is commercially reasonable,” he wrote. “This is the grey window: a regulatory carve-out designed for orderly ETF market-making that is, structurally speaking, indistinguishable from a regulatory arbitrage with unmatched duration.”
That framing is important because Park isn’t claiming APs can merely press Bitcoin decrease eternally. His argument is narrower and more structural. If an AP is short IBIT and chooses to hedge with CME Bitcoin futures moderately than shopping for spot BTC, then the traditional arbitrage pathway that would drive spot purchases turns into weaker. In that setup, the hedge can stay economically tight enough for market-making functions while bypassing fast spot demand.
“The critical implication: if the hedge is futures rather than spot, the spot was never bought,” Park wrote. “The gap cannot close via the natural arb mechanism because the natural arb buyer chose not to buy spot.” He also cautioned that the separation isn’t frictionless, since foundation merchants work to keep futures and spot aligned, but said the premise risk turns into more significant in intervals of stress.
The latest shift to in-kind creations and redemptions, in Park’s view, removes another constraint that beforehand pushed exercise into the spot market. Under the earlier cash-only model, APs had to ship money, which the fund’s custodian then used to buy Bitcoin. That created what Park called a “structural governor” because spot shopping for was a mechanical byproduct of creations. In-kind transfers change that. APs can now source Bitcoin straight, at instances and from counterparties of their selecting, including OTC desks and negotiated transactions that might decrease seen market impression.
Even so, Park stopped short of endorsing outright market suppression claims. “The short answer is that no AP explicitly suppresses Bitcoin price,” he wrote. “What the AP structure can suppress is the integrity of the price discovery mechanism itself. Those are not the same thing—but the second is arguably more consequential than the first.”
Other Experts Agree
Senior ETF Analyst at Bloomberg Intelligence Eric Balchunas commented: “The bogeyman is gone.. That’s the vibe rn on CT and in the price action today. I get it too, that big daily dump [at 10am] seemed to kill every rally and everyone’s spirit. Is eliminating it enough for a sustained rebound? I guess we’ll find out.”
That distinction drew pushback. Monad founder Keone Hon said the idea doesn’t maintain up because a short futures hedge implies another person is short futures and, on average, must hedge elsewhere, preserving the market-wide delta steadiness. Dave Weisberger also argued the declare doesn’t maintain “over any substantial time frame,” noting that futures converge to spot at expiry.
Park didn’t dispute the accounting identification. What he disputed was whether or not that identification settles the sensible query of how long trades can persist inside the system’s regulatory carve-outs. “To be clear, I don’t subscribe to the conspiracy theory that APs suppress price,” he wrote. “The conspiracy theory that I subscribe to, if there is one to be had, is that with infinite duration at zero cost of carry, funny things can happen.”
Leading on-chain analyst James “Checkmate” Check agreed: “Jane Street didn’t suppress the Bitcoin price folks. HODLers all did. It’s just not that hard, stop summoning your inner salty goldbug but blaming manipulators. People. Sold. A. Fucktonne. Of. Spot. Bitcoin.”
At press time, Bitcoin traded at $67,883.
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