3000 Autists vs the World
how jane street framemogged bitcoin holders
So depending on how much of a loser you are, you may be aware that Bitcoin’s price has dropped pretty significantly in the past 6 months. SHit peaked around 120k and now is hovering at 70k and was even midding out at like 63k a few weeks ago. now i dont know shit about bitcoin really other than the fact that i have 25% of my portfolio in it so i had no idea how or why this shit was happening but its pretty significant bc hella mfs have hella bread in this shit
now a couple weeks ago some giganerds on twitter released some bombshells about how Jane Street (trading firm/market maker that recruits autist savants and unleashes them on the markets akin to how your racked homies will accost the one girl at afters who clearly is just there for bag not bc she wants to suck and fuck) but allegedly JS was using its privileged position as a market maker to manipulate the BTC market to make quick money. now what does this mean? im gonna explain it all dont worry my preshii (plural form of precious)
If you know anything about Jane Street you probably are thinking the same thing I did which was “ya that totally sounds like something Jane Street would do”. this is because JS has a pretty robust history of manipulating the fuck out of certain markets so they can make so much money that it probably literally offends God.
before i get into everything i just wanna highlight how fucking absurd the money they make is. JS reported trading revenues of like $24 billion in the first 3 quarters of 2025. that puts them on the same level with banks like JP Morgan, citi, Bank of America in terms of pure trading rev. here’s the kicker, JS has like 3000 employees. those huge banks, conservatively, probably have like 30,000+ mfs in trading or trading support roles. just super ridiculous numbers they do.
Jane street has had some history of fucking people over to make a quick buck so i’ll give you non ball knowers some background before i dive into the current rigamarole.
when i first saw this BTC hubbabaloo my mind instantly went to when india banned Jane street from trading in their markets for doing the same thing to a market in india that they did to BTC. i remember reading the article about how Jane Street was just running amok in indian stocks and just printing cash (over $4billion in pure profit). when i read the article i was laughing. mainly because it was happening in and not to me. so i didnt really care and thought it was kinda cool. my perception has now changed.
then i thought of the terraform scandal. which was basically this huge stable coin in the crypto world that Jane street actually would help provide liquidity to. to dumb this down irresponsibly, JS and the terra nerds had worked together before so JS had some insider info about how their operation worked. combine that with the fact that JS hired some chud named Bryce from terra and he literally made a gc called “bryces secret” where he had Terra employees and JS mfs in there talking about non public info and all of a sudden JS has a huge info edge to the general public. they used this to basically rug pull the entire coin and all of a sudden $40 billion was wiped from the face of the earth. now terra’s entire platform was a house of cards so it was gonna collapse anyway but jane street made sure it did and made sure they made giga bread while they were at it
i thought this was less cool than the india thing bc like they literally just ethered peoples entire savings in like 3 days which helped introduce the crypto winter which ethered much much more bread.
the last thing i thought of was the fact that Jane Streets founder literally got caught funneling millions of dollars to a plot to arm militants to overthrow the government of south sudan. im not even joking lmao this is some actual reet shit. he got himeslf into a plot where he was providing the bread for mfs to buy “AK-47s, stinger missiles, and grenades to topple South Sudans government.” he didnt get in trouble for this either (no idea how) but like this is crazy. imagine if someone like Kevin O’Leary all of a sudden was in the news because he had bought a bunch of bazookas for a romanian militant group or some shit.
Side note: one time i was on a yacht for my drakejacent friend’s bday and kevin o’leary pulled up net to us in the middle of the ocean on his gigayacht and just totally framemogged us and stole half our huzz. it was super wild i had no idea what to do.
suffice it to say jane street has a history of doing some fuck shit and so thats why this whole bitcoin debacle is not very surprising to me. so lets get into what they were doing. obviously theres some more background that you need for this as well.
jane street is a market maker and one of the biggest ones at that. lemme explain in reet terms how a market maker works and makes money. so basically a market maker is a middleman for a stock/security. its analogous to you going to walmart and buying an orange. you’re not buying the orange directly from the orange farmer, you’re buying it from walmart. Jane street is ostensibly walmart here.
the way they make money is by taking whats called a spread. so lets say someone wants to buy a stock thats worth $100. they put in a buy order at that price. Jane street meanwhile is finding a holder for that stock whos looking to sell. lets say that seller puts in a sell order for $99.98 cents. Jane street buys the stock from the person who wants to sell at 99.98 and sells it to the person who wants to buy at $100 and makes 2 cents. most of the time this is happening in a manner of a split second. the trick is to do this a fuckton of times. Jane street doesnt just fill orders for ur average joe. they do it for huge hedge funds and institutional clients as well. on any given day they can do over $200billion in total order volume. thats part of how they print
the key here for bitcoin is that JS is one of the 4 firms that is authorized to market make for Blackrock’s IBIT fund. which is basically an etf where people can invest in Bitcoin without having to be on chain. makes it easier for noobs as well as huge institutions to invest in something that is tied to the BTC price. because of this position that they have they’re almost required to hold massive amounts of BTC so they can always fill orders etc. according to their Q4 filing they hold more than $790mm of IBIT. almost a billy ts
lets finally get into how they completely nuked the price of bitcoin over the past few months. it started this past november. important thing to know here is that even though BTC is on chain so its available to be traded 24/7, IBIT doesnt work the same way. so you can only fill orders when the stock market is open.
every morning at 10AM, 30 mins after the markets would open, Bitcoins price was shedding a few percent like clockwork. what jane street was doing was selling off right at the open (thinner liquidity since day had just started and they could just sell some of the massive supply they had to hold bc they’re a market maker for it) and creating panic in the overall bitcoin market which would send the price down even further. they way they would make profit is that they would have short positions in the derivatives market that would pay out when the price went down.
when the price was down a few percent and their shorts were covered, they would just buy back again at the lower price of bitcoin. lemme explain a short as well. think of it as a bet. JS was betting everyday that Bitcoins price would go down x percent. then they were making sure that happened by selling off massive amounts of bitcoin to ensure that panic set in and other people sold off/were liquidated and BTC’s price dropped. so their shorts would cash.
the part that’s super important to understand is that they didnt have to dump enough bitcoin themselves to push the price down 3%, they just had to start the sell off. other people would panic and sell. other people have stop losses and liquidation prices which would trigger more sell offs. so they didnt even have to even be the full actor here. then thats where the shorts would come in
the thing with a short is that you can use leverage on it. leverage is basically “borrowing” additional money from elsewhere to put on the short. so you can risk $100 to say that BTC is gonna go down 3% but if you use leverage your return can be even greater than that. if you use 3x leverage that means your return if bitcoin goes down 3% will actually be 9%. the kicker is if ur wrong, your $100 loss just became a $300 loss. BUT if you’re the one making sure the price goes down its basically free money.
thats why they're profitable here. bc there’s inherently supposed to be more risk. but theres not bc they lowkirk control the price in that moment. think of it like this: bag has consistently been rising in price in your city for a while. i come to you and bet you that its gonna go down. you take that bet. unbeknownst to u i control 1/4 of the bag supply in your city so i unleash a new supply of bag onto the streets which brings the price down and i win my bet. i lose a small amount of money per gram that i sell to bring the price down. but since i have that bet with you i make it all back and more. thats essentially what Jane street is alleged to have been doing.
they did this every day. for like almost 4 months. the price of bitcoin went from 125k to 63k. they helped cut that shit in half. genuinely insane. the 10 am sell off stopped around feb 25 when those people dropped the bombshells on twitter and everyone got a hold of it. btc went up to 70k shortly after
you gotta remember that jane street only employs 3000 people. conservatively, there are a little over 100 million individual holders of bitcoin. now people who are into bitcoin and crash tf out when the price goes down (i have a super fire life so i didnt really care abt my holding) are largely super annoying and i generally wouldnt really care about them. but this is pretty wild. what im tryna get at is that 3000 super autists who are deadass just normal citizens in theory shouldnt be able to just demolish the price of an asset that is tied to the financial well being of a fuck ton of people. that doesnt seem right.
and it isnt even legal if we’e being real. its just hard to prove for a few reasons and financial regulators are hella behind when it comes to creating new rules to keep up with the convoluted financial products and strategies that come up as the market expands. it took the regulators in india like 4years to catch onto what was happening in their markets (jane street basically did the same thing there albeit with a different asset). and they only really caught on because jane street self snitched and told on themselves while fighting another court case.
the main reason its hard to prove in current form is because while jane street is required to disclose how much of each asset they’re holding on their balance sheet (how we know they hold $790mm of IBIT) they arent required to disclose how much they hold in the derivative market. so at any given point they could actually be negative on their BTC volume because their position in the derivatives market could be more than $790mm short. now it isnt likely that they do this long term obv but it hammers home the point that just looking at their holdings doesnt tell you the whole story.
theres obviously some way to close this loophole and prevent jane street and other market makers from exploiting the system here but i wouldnt hold my breath. regulators are fucking useless and dont do shit so until i rise to power this is a long shot. like bernie madoff was straight up the chairman of nasdaq while running a generational ponzi scheme and regulators were just looking at him slackjawed
last thing here. what does this mean for bitcoin? idrk and idrc tbh but ill give some quick thoughts. some of the trust in btc as a stable asset has probably eroded from the general public because i personally wouldnt want 3000 soulless ghouls to be able to cut my net worth in half just because they feel like it.
the other thing is the fact that a lot of bitcoins value proposition is tied around the fact that its supply is finite. there will never be more than 21 million bitcoin in circulation. thats how it was set up. which theoretically means that over a long enough time horizon the value of BTC should always go up because you cant make any more than that. its finite.
the problem that this whole situation exposes is that if bad faith actors (like jane street) can take massive short positions with leverage, it renders the 21million coin limit moot. at least for a specific period of time. this happens because the price pressure of a massive short position can effectively be beyond the value of 21 million bitcoins.
lemme explain this with another analogy. lets say we’re in a world with only 50 bottles of original quaaludes left. the value of those should keep going up as time goes on right? theoretically yes, but what if i own 15 of those bottles and i come in and i make 20,000 individual bets around town that the price of quaaludes is gonna drop. then i start selling some. that price pressure of 20,000 bets that the price is gonna go down affects the price of the bottles negatively. it pushes it down.
thats the issue. even though there are only 21million bitcoins that will ever exist, theres theoretically an infinite amount of negative price pressure that can be created in the derivatives market.
I have to agree with the indians when it comes to jane street. when they banned those autists from their stock market they said “Jane Street Group is not a good faith actor that can be, or deserves to be, trusted.” Spot on and astute observation! they fr should all be banned from ever participating in the markets again but they wont be. and thats ok. life isnt fair; u just have to thug it out sometimes.
-R
this shit was hella confusing until I read the bag analogy
i understood this better than investing for dummies