A recent debate on X involving Jane Street has drawn a sharp response from Ari Paul. The BlockTower founder, who previously worked as a Wall Street market maker, argues that Bitcoin’s inability to rise further is better explained by selling in the spot market than by a prolonged price-suppression campaign. Paul was direct in his rebuttal: “In short: no.” He acknowledged that market makers do “game the system” in various ways, but in liquid products like Bitcoin ETFs, their impact is usually limited to “meaningful but small costs to consumers,” not a lasting distortion of the asset’s price. He distinguished between short-term trading tactics and the broader claim that a single firm has prevented Bitcoin from reaching much higher levels.
To support his point, Paul described common trading desk behavior: “For example, market makers may manipulate the price to trigger stop-limit orders. But that’s typically an intraday move. They might push an asset like Microsoft or Bitcoin down 2% in a weak market to hit those stops, and then the price usually recovers within seconds or minutes.” In his view, while this is a form of manipulation, it is not the same as structurally suppressing Bitcoin’s price below its fair value for months.
This argument challenges a more conspiratorial narrative circulating online about why Bitcoin isn’t already at $150,000. Paul does not deny that large Wall Street firms can influence short-term trading conditions, but he rejects the idea that such activity is the main reason for Bitcoin’s overall price trend. His core explanation is simpler: “Why is BTC down? Because long-term holders sold tens of thousands of coins, and not enough people wanted to buy them.” This aligns with the view of on-chain analyst James Check, who stated, “Jane Street didn’t suppress the Bitcoin price; HODLers did,” by selling large amounts of spot Bitcoin into the market.
Paul allowed for rare exceptions where Wall Street might manipulate an asset significantly over a longer period, but noted such cases are uncommon because they are risky and less profitable than many assume. “99% of the time an asset isn’t moving as expected and people cry ‘manipulation,’ it’s best to avoid the easy excuse and accept the cognitive dissonance,” he wrote.
This narrows the Jane Street argument considerably. While large firms can affect intraday trading, liquidity, and execution, Paul’s account suggests this is far from proof that a single market maker is responsible for Bitcoin not trading much higher. The theory about Jane Street regained attention recently after Terraform Labs’ wind-down administrator sued the firm in federal court, alleging insider trading related to Terra’s collapse in 2022.The complaint alleges that Jane Street used a private chat called “Bryce’s Secret” to access non-public information. It claims the firm executed an 85 million UST trade on Curve, which contributed to a market selloff. Jane Street has denied any wrongdoing, calling the lawsuit opportunistic. At the time of reporting, Bitcoin was trading at $66,090.
Frequently Asked Questions
Of course Here is a list of FAQs about the topic Could Jane Street Be Manipulating Bitcoin A Former Wall Street Market Maker Says No designed to cover a range of perspectives from beginner to advanced
Beginner Concept Questions
1 Who is Jane Street and why are they mentioned with Bitcoin
Jane Street is a major global quantitative trading firm They are mentioned because they are a significant participant in financial markets including crypto and their largescale algorithmic trading activity leads some to wonder if they could influence Bitcoins price
2 What does market manipulation mean in crypto
It refers to illegal or deceptive trading practices intended to artificially control a cryptocurrencys price or volume Examples include spoofing or wash trading
3 What is a market maker and what does the former one in the article say
A market maker is a firm that provides liquidity by constantly offering to buy and sell an asset The former market maker in the article argues that Jane Streets activities are legitimate market makingproviding liquidity and earning small profits on the spreadnot manipulation
4 So is Jane Street manipulating Bitcoin
Based on the former market makers analysis in the article the argument is no He asserts their activity is consistent with standard legal marketmaking operations common in all mature financial markets
Intermediate Mechanism Questions
5 How could a firm like Jane Street even manipulate Bitcoin
In theory a firm with vast capital could use coordinated trades to create false signals trigger automated stoploss orders or exploit smaller liquidity pools on certain exchanges to move the price However this is illegal and difficult to prove
6 Whats the difference between providing liquidity and manipulating the market
Providing Liquidity Continuously posting public buy and sell orders to facilitate others trades earning the small difference This stabilizes markets
Manipulation Engaging in deceptive trades with the primary intent to move the price for a direct profit from that price movement harming other market participants
7 Doesnt their huge trading volume automatically move the price
Not necessarily A true market maker aims to be market neutral They hedge their positions instantly meaning for every buy they offset