Analyst: Jane Street, other firms suppressing BTC price via ETF structure

Market-making firms like Jane Street are suppressing Bitcoin's price, according to an analysis by Jeff Park, Chief Investment Officer (CIO) of ProCap. Writing on X, Park explained that large securities firms and investment banks acting as Authorized Participants (APs) are leveraging an exemption from the U.S. Securities and Exchange Commission's (SEC) short sale regulation (Regulation SHO) to build short positions without buying spot BTC, hedging with futures instead. He argued that this process distorts the market's natural price discovery mechanism. "This is not an issue limited to Jane Street but rather a structural flaw in the entire ETF system," Park stated. He added that even with the recent introduction of in-kind redemptions, APs continue to insist on hedging only with futures. Park concluded that for BTC to rise naturally, "the ETF redemption mechanism and the incentive structure for APs must be re-examined." This analysis follows recent online discussions alleging that APs, including Jane Street, have used algorithmic selling at specific times to drive down the price of BTC.