Dragonfly Refutes Jane Street Sell-Off Theory for BlackRock’s Bitcoin ETF
Dragonfly's Rob Hadick says Jane Street's alleged 10 a.m. Bitcoin sell-offs—blamed for driving Bitcoin from $125,000 to $62,000—are routine ETF hedging flows by authorized participants aligning IBIT with NAV. Analysis of data between 10 and 10:30 a.m. shows Bitcoin has trended upward, contradicting the dump narrative.
1. Role of Authorized Participants
Authorized participants in spot Bitcoin ETFs create and redeem shares to keep fund prices aligned with net asset value, using spot Bitcoin, futures, and other instruments. These trades often concentrate around high-liquidity windows such as the 10 a.m. U.S. market open.
2. Sell-Off Allegations Against Jane Street
A theory claimed that Jane Street systematically sold Bitcoin near 10 a.m. to suppress prices—cited as a factor in Bitcoin’s decline from its October $125,000 peak to recent lows of about $62,000—so it could accumulate ETF shares at a discount.
3. Dragonfly’s Counterargument
Dragonfly’s Rob Hadick challenges this narrative, explaining that such flows represent routine hedging rather than directional pressure. He highlights data showing Bitcoin tends to rise between 10 and 10:30 a.m., undermining the sell-off claims.
4. Implications for IBIT Investors
If this clarification gains acceptance, it could reduce unwarranted volatility in BlackRock’s IBIT ETF by dispelling fears of coordinated manipulation, potentially stabilizing investor confidence in fund pricing and liquidity.