Bitwise CIO Matt Hougan dismisses Jane Street’s blame for the Bitcoin dip

Matt Hougan dismissed claims that Jane Street is orchestrating Bitcoin’s recent downturn, calling the recession “a classic crypto winter.”

Matt Hougan, Chief Investment Officer at Bitwise, has pushed back on claims that trading firm Jane Street is behind Bitcoin’s recent decline. He wrote on X on February 26 that the recession is “a classic crypto winter” and not a coordinated attack.

His comments come as lawsuits and viral discussions revive old fears about market manipulation, just as Bitcoin is trading more than 46% below its all-time high.

Collusion claims clash with ETF mechanisms

Speculation intensified after reports emerged that Terraform Labs’ bankruptcy administrator had sued Jane Street in a Manhattan federal court, accusing the company of using insider information before Terra-Luna’s May 2022 collapse.

According to the complaint, Jane Street withdrew 85 million TerraUSD from Curve’s 3pool minutes after Terraform removed 150 million UST, a sequence that accelerated the $40 billion collapse, according to the lawsuit. Jane Street has denied the allegations, calling the case a “desperate attempt” to recover losses and blaming Terraform’s management for the failure.

At the same time, some crypto analysts, including Bull Theory, have so-called that Jane Street is using a ’10 AM’ selling algorithm to push Bitcoin lower and profit from derivatives.

Bull Theory also pointed to an interim order from the Securities and Exchange Board of India accusing Jane Street entities of manipulating the maturity index between January 2023 and March 2025, raking in thousands of crores in illicit profits. The case is still ongoing and the company has appealed.

However, Hougan rejected the story as misplaced. “The conspiracy theories are running wild,” he wrote, arguing that Bitcoin is in trouble because investors have unwound long positions, reduced debt and moved capital elsewhere.

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The Bitwise CIO too strengthened colleague André Dragosch’s analysis of Bitcoin’s intraday performance since the ETF’s launch in January 2024. Dragosch’s data refuted the viral 10am story by showing pronounced weakness around midnight ET, pointing to non-US trading hours as the actual period of vulnerability.

Macro strategist Alex Krüger also echoed Hougan’s skepticism: calling the Jane Street theory “another viral and flawed conspiracy theory.” He noted that basic traders and authorized participants (APs) are simply bridging the gap between ETFs, futures and spot markets.

“There are currently too many ominous stories and conspiracy theories floating around looking for villains,” Krüger said. “Historically, that’s the kind of sentiment you see at the bottom.”

Structural questions linger behind the debt

The controversy has also revived the ETF plumbing debate. Jeff Park, CIO of ProCap wrote on February 25, the concern is less about a single company and more about how APs operate under statutory exemptions that allow in-kind creations and redemptions.

In theory, APs can hedge ETF exposure with futures instead of buying spot Bitcoin directly, which critics say could blunt spot demand.

None of the lawsuits or regulatory filings to date point to coordinated misconduct in the Bitcoin markets. Still, the overlap between large quantitative firms, derivatives strategies and ETF mechanisms during a recession has fueled suspicion.

For Hougan, the explanation is simpler. Bitcoin’s four-year cycle, leverage resets, and investors’ shifting priorities are enough to explain the pullback.

“This is a classic crypto winter and there will be a classic crypto spring,” he wrote. “People want someone to blame – I understand that – but the reality is much more boring than that.”