WuBlockchain Space 的这一集以一篇文章为中心，指责 Jane Street 通过 ETF 流动和衍生品结构“系统性地压制比特币价格”。文章将Terra崩盘诉讼、印度市场监管处罚，以及美股开盘后的所谓“上午10点抛售”格局联系起来，质疑是否存在协同市场操纵行为。嘉宾包括前沿科技投资人迪迪尔、CoinEx机构业务分析师孙晓川、宏观对冲基金PM Albert Luxon、资深分析师贾米诗迪。座谈会从做市商商业模式、ETF赎回机制、期权Delta等多个角度进行反驳。对冲逻辑和 CME 基差套利结构。他们的要点： 1．所谓的“系统性倾销”更有可能是由 ETF 赎回引发被动抛售以及期权做市商的对冲资金流推动的。2。 IBIT 等比特币 ETF 的大量流入和流出通常与基差套利策略相关，而不是只做多的机构信念。3。 “10/11爆仓事件”后，加密货币市场整体流动性大幅下降，市场正常运行
国王的活动似乎被夸大了——而且很容易被误解为“操纵”。4。做市商基本上是德尔塔中性的。他们的利润来自利差和波动，而不是定向押注。讨论还涉及更广泛的宏观背景：流动性收紧的预期、美国国债重组、通胀风险以及美国股市与加密市场之间的高度相关性。短期内，市场缺乏明显的流动性催化剂。专家组预计明年将出现更多结构性机会，而不是广泛的贝塔驱动的反弹——例如预测市场或政策驱动的板块。总体而言，结论倾向于认为“阴谋叙事”反映了市场情绪和损失后归因偏差，而不是确凿的证据。
This episode of WuBlockchain Space centers on an article accusing Jane Street of “systematically suppressing Bitcoin prices” through ETF flows and derivatives structures. The piece links together the Terra collapse lawsuit, regulatory penalties in the Indian market, and the so-called “10 a.m. dump” pattern after the U.S. stock market opens, questioning whether there is coordinated market manipulation at play.
Guests included frontier tech investor didier, CoinEx institutional business analyst Sun Xiaochuan, macro hedge fund PM Albert Luxon, and veteran analyst Jiami Shidi.
The panel pushed back from multiple angles, including market maker business models, ETF redemption mechanics, options delta hedging logic, and CME basis arbitrage structures. Their key points:
1. The so-called “systematic dumping” is more likely driven by ETF redemptions triggering passive selling, along with hedging flows from options market makers.
2. Large inflows and outflows in Bitcoin ETFs such as IBIT are often tied to basis arbitrage strategies, rather than long-only institutional conviction.
3. After the “10/11 liquidation event,” overall crypto market liquidity declined significantly, making normal market-making activity appear exaggerated — and easily misinterpreted as “manipulation.”
4. Market makers are fundamentally delta-neutral. Their profits come from spreads and volatility, not directional bets.
The discussion also touched on the broader macro backdrop: expectations of tightening liquidity, U.S. Treasury restructuring, inflation risks, and the high correlation between U.S. equities and crypto markets. In the short term, the market lacks a clear liquidity catalyst.
Rather than a broad beta-driven rally, the panel expects the next year to present more structural opportunities — such as prediction markets or policy-driven sectors.
Overall, the conclusion leans toward the view that the “conspiracy narrative” reflects market sentiment and post-loss attribution bias, rather than hard evidence of systemic manipulation.
The audio transcription is done by GPT and may contain errors.
Scrutinizing the Accusations Against Jane Street: Connecting the Dots, Market Structure, and the Logic of “Manipulation”
Maodi: Welcome to WuBlockchain Space. A few days ago, a Twitter user named Justin published a piece arguing that Bitcoin’s long-term price suppression could be traced back to Jane Street — the well-known Wall Street market maker and high-frequency trading giant.
The article makes three main points.
First, it references an ongoing federal lawsuit related to the Terra collapse. The case mentions an individual who previously worked at Jane Street, later joined Terra, and then returned to Jane Street. The author questions whether this person may have been involved in insider trading or had access to material non-public information during that period.
Second, it points to a pattern observed in the market last year: around 10 a.m., shortly after the U.S. stock market opens, Bitcoin would often experience a fairly consistent sell-off, followed by a rebound.
Third, while Jane Street’s holdings in Bitcoin ETFs are publicly disclosed, its hedging positions in the derivatives market are not visible to the public. Based on this asymmetry, the author concludes that Jane Street may have been manipulating Bitcoin’s price.
didier, what’s your take on this piece? Which parts are verifiable facts, and which feel more like speculation or narrative framing?
Separating Two Threads: The Luna Controversy vs. ETF Redemption Mechanics
didier: The article is really talking about two different things.
The first is Luna — meaning Terraform Labs. In my view, that ultimately has to be settled by the courts. To be honest, at the time, quite a few people in the industry may have had early access to certain information. We’ve all seen speculative reports. But you can’t conclude, based on that alone, who definitely had insider information and who didn’t. In any case, that issue isn’t directly related to what we’re discussing today.
The second claim is that market makers like Jane Street engage in systematic “dumping.” My take is that what people are seeing is largely a function of how market makers operate — their business model and trading mechanics.
According to the article, these sell-offs often happened around the open of IBIT. We need to remember that after the “10/11 liquidation event” last year, many active market makers were effectively wiped out, and overall liquidity dropped sharply. At the same time, spot Bitcoin ETFs — including iShares Bitcoin Trust (IBIT) — experienced sustained outflows.
In that environment, as one of IBIT’s core market makers, Jane Street receiving redemption orders and selling spot Bitcoin at the open to hedge is completely normal. It’s standard operating procedure. Once the redemption flow is completed and the sell pressure fades, natural buying interest pushes the price back up.
I don’t see that as intentional market manipulation. You see similar patterns in equities all the time. If the position size is large, it can look dramatic and be misinterpreted. But “market manipulation” is a very serious accusation. Without hard evidence, you can’t make that call just from price action.
Let me add one more point. The IBIT outflows last November weren’t just about directional bets. A major factor was the sharp compression in Bitcoin basis yields, which led arbitrage capital to unwind.
Here’s the basic mechanism: Bitcoin futures on the Chicago Mercantile Exchange (CME) often trade at a premium to spot. Many quant funds short CME Bitcoin futures while going long spot to capture that basis. The risk lies in basis movement, since CME futures are cash-settled rather than physically delivered — so basis risk exists.
For compliance reasons, many regulated institutions can’t directly hold spot Bitcoin. Instead, they gain long exposure through ETFs. The largest vehicle is IBIT. That’s why, when you look at IBIT’s top holders, you’ll often see either market makers like Jane Street or hedge funds running basis trades — including some based in Hong Kong. They’re not necessarily long-term Bitcoin bulls; they’re executing arbitrage strategies.
When basis yields are attractive — say 12–15% annualized — you typically see large IBIT creations and a sharp rise in CME open interest, with shorts increasing. The relationship is pretty clear.
When yields compress below 5%, arbitrage funds unwind. CME open interest declines, short positions are covered, and IBIT shares are redeemed. During that redemption process, market makers must sell spot Bitcoin — which shows up as the “dumping” people talk about.
So there’s a common misunderstanding in the market: when IBIT sees large inflows, people assume traditional financial institutions are bullish on Bitcoin; when there are large outflows, they assume they’ve turned bearish. In reality, it’s often just arbitrage capital adjusting positions based on yield.
Big inflows don’t necessarily mean bullish conviction. Big redemptions don’t necessarily mean bearishness. It’s simply the mechanical outcome of basis trades being opened or closed.
As for why this has looked especially pronounced since last November, I think the core issue is liquidity. The 10/11 event was a major shock. Official liquidation figures showed about $19 billion — a record — but many insiders believe the real number was closer to $30–50 billion. At the time, total crypto market cap was around $3 trillion, and a large portion of tokens weren’t even liquid. When hundreds of billions in notional positions unwind in a single day, that’s a serious liquidity hit.
In a thin market, sustained ETF redemptions combined with hedging flows from market makers stand out much more.
And Jane Street isn’t controversial only in crypto. You hear similar complaints in equities. Some stock investors joke that if a name is heavily market-made by Jane Street, it can struggle to trend smoothly upward — probably because they’re running arbitrage and market-neutral strategies that dampen one-sided moves.
But market making and arbitrage are normal parts of market structure. Unless there’s clear evidence of deliberate manipulation, it’s not reasonable to jump to that conclusion. And if fundamentals are strong enough, no arbitrage desk can suppress a real trend. On the flip side, trying to force a move against the broader trend is extremely risky.
Take Circle for example — its stock jumped about 45% a few days ago. There were rumors that some hedge funds had built roughly $500 million in short exposure and may have taken heavy losses. Fighting momentum is expensive.
So my view is that firms like Jane Street and Jump Trading are primarily running market-neutral strategies. They’re not sitting on large unhedged directional bets for long periods. What people are seeing looks much more like standard market-making behavior — just amplified in a lower-liquidity environment after the 10/11 shock.
As for whether there was insider trading in the Luna case, that’s a separate legal issue. It shouldn’t be conflated with how ETF market-making works.
From Narrative to Data: A Logical Breakdown of the Jane Street Manipulation Allegations
Sun Xiaochuan: Regarding that article and the series of follow-up pieces it triggered, my first impression is that it’s written in a very “traffic-driven” style. It starts by invoking the Terra incident — that is, the UST/Luna collapse — then brings up the previous fines imposed on Jane Street in the Indian market, and finally ties everything together with the so-called “10 a.m. sell-off” phenomenon. Structurally, this kind of storytelling is extremely effective at grabbing attention.
With that narrative framework in place, once the logic unfolds step by step, readers are naturally inclined to believe that the “10 a.m. dump” must also be a deliberate act on their part.
From my perspective, however, I’m more inclined to view this as relatively normal market-making behavior rather than intentional or malicious price suppression.
Second, after reading the article, I pulled the charts myself and analyzed data from the past 60 days, focusing specifically on price action during the first 90 minutes after the U.S. stock market opens. I compared IBIT, QQQ, and IGV (the SaaS-heavy ETF that has recently underperformed). If you look at their performance during that opening window, the so-called “dump” looks much more like synchronized market weakness.
In particular, IBIT and QQQ show a very high degree of correlation. From a chart perspective, this resembles a broader beta-driven market move rather than independent manipulation by a single entity.
Third, thinking from the standpoint of market manipulation: if I were trying to manipulate the market, I wouldn’t choose the U.S. market open. Anyone who has traded for a long time knows that the opening session is one of the most liquid periods of the day.
In contrast, during U.S. after-hours trading, the gap between the European close and the Asia-Pacific open, or over the weekend — when liquidity is thinner — it would be much easier and cheaper to move the market if someone were truly attempting to manipulate prices. There’s little incentive to operate during the most liquid window of the day, when counterparties are abundant and variables are highest, because that only increases uncertainty and execution risk.
So overall, my view is that this article is a textbook example of a highly effective, traffic-oriented piece. Its narrative structure is coherent and subtly suggestive. But from a factual and market-structure perspective, I personally do not lean toward the conclusion of “deliberate manipulation.” That’s my preliminary take.
“The 10 A.M. Sell-Off” Phenomenon: Timing Patterns, Redemption Pressure, and Questions Around Execution
Maodi: You both mentioned the timing of the so-called “sell-offs.” The original article claims that since 2024 there has been a fixed pattern of selling at 10 a.m., and that it continued into 2025. Based on your observations, does the timing you’ve seen actually match what the article describes? From what I just heard, it seems didier was focusing more on the period after the “10/11 event.”
My question is this: even if there were redemption pressures, why concentrate the selling right after the market opens? Why not execute in tranches to reduce market impact? Why would the timing be so clustered?
Why are hedging and liquidations concentrated around the market open?
didier: I think it ultimately comes down to liquidity.
If you look at overall trading volume, there’s a clear pattern. I follow Robinhood quite closely, and its crypto trading volume is basically a microcosm of the broader market.
Robinhood’s highest crypto revenue quarter was Q4 the year before last-around the time Trump was elected. That was the peak. Starting in Q1 last year, volumes declined month by month: January was lower than the previous December, February lower than January, March even lower. In Q2, April and May were especially weak, with monthly volume only around $7–8 billion. Q3 improved slightly because some large-cap tech stocks were active. But in Q4, things softened again.
Especially after the “10/11 event,” all the way through this January, overall volumes have stayed near last year’s lows. Robinhood’s stock getting cut in half is closely related to that contraction in trading activity.
So this pattern of “dumping at the open” isn’t new. It happened before. The reason people didn’t complain about it in the past is simple: liquidity used to be better. Prices would recover quickly, and it felt normal. Now liquidity is thin, so the same behavior looks much more aggressive and disruptive.
As for why selling is concentrated at the open instead of being executed gradually: from a market maker’s perspective, the core principle is to avoid taking on directional risk.
When they receive ETF redemption orders, they need to deliver cash. That means selling spot or hedging exposure. Naturally, they’ll choose to execute during the most liquid periods of the day-and the U.S. market open is often one of the most liquid windows. Selling when liquidity is deepest minimizes market impact and slippage, and allows them to neutralize risk as quickly as possible.
For market makers, time risk is real risk. The longer you wait, the greater the uncertainty from price volatility.
Take Nvidia as an analogy. Before earnings, many investors bought call options. To hedge those positions, market makers had to buy the underlying shares. After earnings were released and implied volatility collapsed, they found themselves long too much stock and had to sell quickly to rebalance to a neutral position.
You could call that “market makers dumping the stock,” but fundamentally it’s hedging-not manipulation.
The same logic applies here. As market makers account for a larger share of trading volume, their hedging flows naturally have a bigger impact on price. The market may interpret this as manipulation, but their business model is to earn spreads and fees while staying neutral. Historically, market makers who held persistent directional bets or excessive one-sided exposure have mostly failed or gone bankrupt.
They don’t care where the price ultimately goes. They care about neutralizing risk quickly and maintaining a balanced book. Since liquidity is best at the open and execution efficiency is highest, it’s natural that most hedging gets done during that window.
Of course, I’m not a professional market maker, and the real execution mechanics are likely more complex. But from a structural perspective, this looks like normal risk management behavior-not deliberate price manipulation.
Volatility at the Open, Options Flows, and the Amplification of “Conspiracy Narratives”
Sun Xiaochuan: I’ve actually been following Zerohedge for quite a while. Even early on, I noticed they frequently mentioned this phenomenon of “10 a.m. dumping.” But at the time, not many people in the market paid attention to it.
Maybe it’s like didier said-back then, overall market conditions weren’t as weak as they are now. Liquidity and trading volume were still relatively healthy. So even though Zerohedge kept pointing it out, it didn’t trigger the kind of public discussion we’re seeing recently. I didn’t dig into it too deeply at the time either.
As for why activity concentrates around the market open, I see two main reasons.
First, anyone who has traded U.S. equities for a long time knows that the most liquid and active periods are usually the first 30 minutes to an hour after the open, and the final 30 minutes to an hour before the close. These windows see the highest trading volume and the most participation. Institutions often rebalance positions during these times, and order flow can be very aggressive. So seeing large moves during these periods is, in itself, quite normal.
Second, the growing influence of the options market. Options now have an increasingly significant impact on the spot market.
For example, CME Bitcoin futures volume has at times surpassed Binance, with market share reaching 30–40%. Meanwhile, IBIT’s options trading volume and open interest have already exceeded Deribit’s. Under these conditions, market makers are carrying substantial options exposure and must constantly perform delta hedging and rebalance their books. Retail activity in the options market can directly drive hedging flows in the underlying spot market.
Putting these two factors together: on the one hand, the market open offers the deepest liquidity and highest volume; on the other hand, that’s precisely when market makers are actively managing inventory and hedging risk. So if you see pronounced-or even sharp-volatility around that time, it’s actually not that surprising.
That’s just my personal view.
The Boundaries of Crisis Narratives: From Zerohedge to a Structural View of the “10 a.m. Dump”
didier: Let me add something about Zerohedge.
I’ve been reading Zerohedge since 2010-so about fifteen or sixteen years now. My overall impression is that it publishes plenty of sharp insights, and some of its contributors are genuinely high-level. But stylistically, it leans heavily toward cynicism. In some ways, it resembles Bitcoin maximalists: there’s a strong tendency to believe the existing financial system is fundamentally broken-so broken that it deserves to be torn down and rebuilt from scratch.
The problem is that real-world markets rarely evolve according to such extreme logic. Unless you’re in the middle of a major financial or economic crisis, most of the time what you have is a flawed system-not one on the verge of collapse.
Take a classic example. For years, Zerohedge criticized JPMorgan for allegedly shorting massive amounts of “paper silver,” arguing there wasn’t sufficient physical backing and calling it the largest silver short in the world-claiming it would eventually face a historic short squeeze. Many people think this narrative emerged only in recent years, but it’s actually been around for more than a decade. When I first started reading Zerohedge, this argument was already there.
The critique-that the precious metals market is dominated by paper contracts rather than physical settlement-does point to a structural issue. There’s a certain logic to it. But more than ten years have passed, and the system hasn’t collapsed. Only in recent years, when silver volatility resurfaced, did people start saying, “This time it’s finally going to blow up.”
You can apply the same reasoning to today’s “10 a.m. dump” narrative. There may indeed be structural mechanisms at play-such as concentrated market maker hedging flows causing visible price impact. But that doesn’t automatically imply a coordinated conspiracy behind it.
Think back to the 2018 bear market. Many accused certain exchanges of manipulating prices through suspicious wick prints and questionable data practices. On Twitter, there was even a “withdraw your coins” campaign-people pulled funds off exchanges, and prices briefly rose. Some concluded that exchanges had gotten scared and stopped “dumping” the market.
But in the end, the system didn’t collapse. Exchanges didn’t fail en masse because of those accusations.
What I’m trying to say is this: many market phenomena do have structural explanations. There can be incentive conflicts and power dynamics. But true systemic conspiracies-or total breakdowns-are rare.
Zerohedge is worth reading. It can be thought-provoking. But it’s not something to interpret too literally or apocalyptically. As for the “10 a.m. dump,” I’m more inclined to see it as the combined result of market structure, liquidity conditions, and hedging mechanics-not the deliberate manipulation of a single dominant actor.
Jane Street’s Role in Crypto: ETF Market Making, Creation/Redemption, and Market Structure
Maodi: You just mentioned that when Jane Street accumulates certain stocks, those names sometimes struggle to rally. From a crypto perspective, what exactly is Jane Street doing in Bitcoin ETFs? Are they mainly handling creations and redemptions and market making? And more broadly, what role do they play across the crypto market? Their connection seems pretty deep-can you walk us through it?
Market Maker Hedging Logic and the Impact of Derivatives Scale
Albert: When that news came out, I saw some people angrily accusing Jane Street of manipulating the market. I honestly just laughed. Many investors simply don’t understand what delta-neutral trading actually is. A market maker’s core profits don’t come from being long or short directionally — they come from non-directional sources.
Whether it’s futures market makers, options market makers, or ETF liquidity providers, their core logic is not “bullish or bearish.” So where do they make money?
First, from the bid–ask spread.
Second, from basis — for example, the spread between spot and futures.
Third, from the volatility premium, especially in the options market.They earn almost nothing from directional calls. Within the market-making industry, this is basic common sense. But many retail investors don’t realize this, so they assume institutions are “manipulating prices.”
Now, when derivatives markets become large enough, market makers’ hedging flows can indeed move prices — but that’s very different from manipulation.
Let me give you an example. On Deribit, Bitcoin options open interest has long accounted for more than 80% of total crypto options open interest, and sometimes even exceeds 100% relative to other venues combined. Once that ratio stays above 0.8, hedging effects become very noticeable.
What that means is: when the options market builds up massive positions, market makers are forced to rebalance their delta exposure frequently. If they have to hedge aggressively during periods of thin liquidity, order book prices can be pushed around in the short term, sometimes causing sharp volatility spikes.
Now look at U.S. equities. When we were backtesting U.S. stock strategies, we found that the 9:30–10:00 a.m. window is extremely chaotic. It’s very hard to find stable short-term patterns because volatility is so intense. Why? Because options market makers, futures market makers, and ETF liquidity providers are all scrambling to hedge at the same time.
Unlike crypto, U.S. equities don’t trade 24/7. Pre-market and after-hours liquidity is limited. If a major event happens overnight — say geopolitical conflict or macro surprises — market makers can’t fully hedge their risk during those thin sessions.
So at the opening bell, they must aggressively neutralize the delta exposure accumulated overnight. That’s why volatility between 9:30 and 10:30 tends to be elevated. A similar dynamic happens into the close: options market makers rebalance again. In effect, there’s often one major hedge cycle near the open and another near the close.
Mechanically speaking, when derivatives markets grow large enough, market makers’ hedging flows will materially affect short-term price action. During illiquid periods or when information is released in clusters, the impact becomes amplified.
But fundamentally, this is risk management and inventory rebalancing — not trend manipulation.
Long-term price direction is driven by capital flows, fundamentals, and macro conditions, not by short-term hedging flows from market makers. Hedging primarily shapes short-term volatility structure, not long-term direction. That distinction is important.
The Matthew Effect and High-Frequency Infrastructure Advantages
Albert: First of all, Jane Street is one of the most systemically important market makers in the world. It’s one of the largest ETF market makers globally — in many cases, more important than participants within traditional brokerage frameworks.
It wasn’t built as a traditional hedge fund. It grew out of high-frequency trading. For years, it has provided liquidity across global markets, accumulating deep expertise in infrastructure, algorithmic modeling, and execution efficiency. From a market structure perspective, it has undeniably contributed significant liquidity to global markets — of course, on the premise that it’s doing so profitably.
From a reputational standpoint, there’s little incentive for it to take the risk of manipulating markets. If “market manipulation” were ever proven, the consequences wouldn’t just be a fine — it would mean a collapse of its reputational capital. Exchanges, institutions, and counterparties would reassess the risk of working with it. For a market maker that depends on trust and scale expansion, that cost far outweighs any short-term gain.
That said, we also can’t ignore its enormous structural advantages.
High-frequency, quantitative, system-driven market making is a classic Matthew Effect industry — the strong get stronger. If you accumulate enough capital, data, and experience early on, you can reinvest in better infrastructure, lower-latency connectivity, more efficient matching systems, and top-tier talent. Those investments then reinforce profitability, which generates even more capital to upgrade infrastructure again.
Once that flywheel is established, it creates a powerful winner-take-most dynamic. That doesn’t mean market manipulation — but it does create an “almost unfair” competitive edge.
Think of it like professional esports players. Their reaction speed, anticipation, and information processing ability are the result of years of training and resource investment. To an average player watching the replay, it can look like they’re “using cheats.” In reality, it’s accumulated technical mastery.
Markets work similarly. Jane Street has world-class infrastructure, ultra-low latency, and highly refined models. When it operates in the order book, ordinary traders can easily feel that the game is unfair — because faster participants consistently step ahead of them. But that sense of unfairness stems more from differences in technology and information processing than from malicious intent.
Of course, such advantages do raise regulatory questions. Some markets impose restrictions on ultra-low-latency trading. Others introduce speed bumps to level the playing field. In certain jurisdictions, regulators have even temporarily restricted high-frequency firms’ trading access — though the tradeoff is usually reduced liquidity.
Ultimately, regulators are constantly balancing two goals: liquidity and fairness.
FUD Everywhere: Extreme Sentiment, Conspiracy Narratives, and the “Buy the Dip” Game
Colin: Finally, I’d like to hear your outlook on the market. In a sluggish environment like this-where liquidity is thin, most people are heavily spot-exposed, and many are sitting on unrealized losses-it’s easy to start looking for a “villain.” That probably explains the surge in conspiracy narratives lately. Some are bearish, others oddly bullish-like the talk about “mysterious Eastern forces” or “Hong Kong capital stepping in to buy the dip.”
Deep down, everyone more or less knows what’s going on, which makes these stories somewhat amusing. But with FUD at these levels, how do you assess the market? Some friends have even told me that if sentiment is this bad, maybe we’re already at peak capitulation-does that mean it’s time to start buying the dip?
Emotional Venting, Conspiracy Theories, and Timing the Bottom
Sun Xiaochuan: There’s definitely been a lot of FUD lately-and a lot of arguing. Indicators like the Fear & Greed Index and on-chain data are being discussed every day, and I’m sure analysts are tracking them more professionally. Beyond that, there are also softer and harder signals floating around. For example, people rotating into Korean semiconductor stocks or gold; retail investors on RedNote (Xiaohongshu) starting to “take the bags”; relatives asking during Lunar New Year, “Is Bitcoin still worth buying?” These are a mix of subjective sentiment gauges and objective data points, and they’re constantly around us.
Are these bottom signals? I think they’re references, but they’re subjective. For me, the key question when considering buying the dip is this: if you enter around $67,000–$68,000 and it drops another 50%, can you handle it? If you can, then you can participate. If you can’t, then it’s probably not the right timing. Left-side trading, judging from this industry’s history, often lasts longer and feels more painful than people expect. If you’re playing the left side, you have to ask yourself whether you can stomach another halving.
Personally, I prefer waiting for right-side confirmation. Take October 2023, when Cointelegraph mistakenly reported that a Bitcoin ETF had been approved. The market spiked, then dumped after the correction. But that incident made it clear everyone was waiting for that trigger, and buyers quickly stepped in. For me, a clear catalyst like that offers a more comfortable entry point. Pure left-side betting carries significantly higher risk.
As for the outlook, I think this year will be highly volatile. First, it’s a U.S. midterm election year. Historically, midterms tend to shift policy direction and market expectations. It’s rare for one party to hold the presidency, the Senate, and the House and then expand its advantage during midterms. As elections approach, policymakers often roll out stimulative measures to win votes, which naturally adds volatility.
Second, the correlation between U.S. equities and crypto has strengthened in recent years-especially with tech stocks. SaaS sector swings often spill over into crypto. We’ve already seen AI-driven rotations, where “one sector gets crushed per day.” At the core, this is liquidity rotating among high-risk assets. BTC and ETH, which sit further out on the risk curve, inevitably feel the impact. For example, just last night the market tried to bounce, only to be dragged back down by NVIDIA. That’s a textbook case of risk-asset linkage with U.S. equities.
The “Mag 7” have also been consolidating for a while, and marginal confidence in the CAPEX growth narrative is fading. If a bellwether like NVIDIA starts showing signs of slowing growth, it can easily evoke memories of late 2021-when leading stocks lost momentum and the broader market peaked soon after. In this environment, even minor shocks can ripple across sectors. Add in commodity supply chain disruptions and geopolitical risks-like ongoing concerns around Iran-and volatility becomes almost inevitable.
So my overall view: this will be a year of big swings. Volatility itself creates opportunity. If you want to participate, consider using smaller position sizes for swing trades-but only if you can truly handle the downside risk. That’s my take.
Liquidity Vacuum and the Question of “Who’s the Next Buyer?”
didier: I think the macro narrative this year has shifted quite a bit. Initially, I expected strong performance in the first half, with crash risk in the second. But seeing Trump willing to nominate someone like Warsh-who previously worked with Bessent-suggests there may be a broader strategy at play.
Another possibility is “suppress first, then stimulate.” For example, keep things tight in the first half, then engineer a rebound in the second half to improve odds ahead of the midterms. Historically, over the past century, it’s been very difficult for a president’s party to win midterms during a second term. If he wants to break that pattern, more aggressive tactics wouldn’t be surprising. Kevin Warsh’s nomination itself was somewhat unexpected; markets hadn’t priced him as a top probability candidate. And before formal confirmation hearings in the Senate, he won’t be making public remarks. The market is also watching the intellectual lineage-both Warsh and Bessent were influenced by Stanley Druckenmiller.
The issue is that while they remain silent, the market enters a liquidity “vacuum.” Whether it’s quantitative tightening or other forms of liquidity management, markets care deeply about the direction of liquidity. Until their stance becomes clear, Bitcoin lacks a strong liquidity-driven trading anchor.
Some peers believe U.S. small- and mid-cap stocks could outperform the “Mag 7” this year. I tend to agree that, given the external uncertainty, crypto in 2024 may be more about generating alpha rather than betting on beta. Liquidity expectations are in a chaotic phase-not clear enough to justify large directional bets.
So where might alpha come from? Prediction markets, for one. If you look across equities, crypto, and broader Web3-linked assets, prediction-market protocols could be relatively strong plays over a one- to two-year horizon.
Long term, if you’re willing to hold Bitcoin for five or ten years at these levels, I still think the probability of profit is high. But in the short term, we simply don’t know.
The real question is this: if price drops, many will buy the dip, believing it’s closer to a bottom. But if price rises, you still can’t answer the core question-who’s the incremental buyer?
In the 2020 bull market, it wasn’t just QE in theory; it was concrete buyers. From 2020 to 2021, the key source of demand was Grayscale’s GBTC. At the time, GBTC was a closed-end trust-subscriptions were allowed, redemptions weren’t. Before that bull run, GBTC held roughly 200,000 BTC; by the end, it held about 640,000–650,000 BTC. That’s a net accumulation of roughly 450,000 BTC in a year-without selling a single coin. That’s extremely sticky buying pressure.
When GBTC later traded at a discount and demand slowed, the baton passed to MicroStrategy. MicroStrategy has continued accumulating and now holds over 700,000 BTC. But its premium has narrowed, and the company has begun building USD reserves to hedge against potential negative-rate risks. Its marginal purchasing power may be weakening.
So who replaces Grayscale and MicroStrategy as the next structural buyer? There’s no clear answer yet.
Now consider gold versus Bitcoin. The biggest structural shift happened after the Russia-Ukraine conflict in 2022. Before that, gold and Bitcoin were both constrained by Fed rate and liquidity expectations-effectively locked in the same macro “cage,” driven by similar factors. As “higher-beta gold,” Bitcoin tended to outperform. But after 2022, gold was “released.” Many countries, including China, began restructuring FX reserves and increasing gold allocations, creating a long-term central bank bid. That structural demand attracted speculative flows as well, creating a sort of seesaw dynamic between gold and Bitcoin. Watching the gold/BTC ratio has therefore become an important macro signal.
Overall, I think Bitcoin currently lacks a strong catalyst. You may feel it’s cheap at certain levels and be willing to buy-but if the market is to push meaningfully higher, who is the next powerful incremental buyer? That remains unclear.
So this year, I’m more focused on alpha opportunities-prediction markets, for example. Also, if the CLARITY Act or broader market-structure legislation passes, certain sectors could benefit in a more structural way. At this point in time, from my perspective, Bitcoin may rank lower in priority for this year. That’s my view.
Macro Liquidity, YCC Expectations, and Dollar Risk
Albert: Based on current expectations, I’ll break this down into a few key points. First, judging from market conditions right now, any rally is likely short-term in nature, because there’s no real liquidity underpinning the move.
The first point: I saw news that the U.S. may ease the SLR (Supplementary Leverage Ratio) rules around April 1, potentially releasing about $210 billion in liquidity. But this kind of liquidity is more like emergency relief than broad stimulus. It would mainly flow into the short-term Treasury market, not long-duration bonds-let alone directly into risk assets. In other words, the Treasury might try to suppress long-term yields by issuing more short-term debt, but structurally this isn’t necessarily bullish for the broader dollar asset system. Even if rate cuts are still expected this year, this type of liquidity injection won’t resemble QE-style flood liquidity. It will prioritize low-risk assets first. For crypto-high-risk assets priced in dollars-the share of liquidity they receive would be extremely limited.
The second point is potential YCC (Yield Curve Control) expectations. If the government needs to contain debt levels, suppress rates, and stimulate the economy ahead of midterm elections, and implements a de facto YCC-financing through short-term debt to purchase long-term bonds-this creates a risk: the dollar could depreciate both domestically and externally. Domestically, tariffs and similar factors could drive imported inflation. Externally, shortening the average duration of sovereign debt weakens credit quality at the margin. The shorter the duration, the more reliant the system becomes on rolling short-term funding, which actually increases risk premiums. From an investor’s perspective, if a country increasingly depends on short-term financing, its marginal credit quality deteriorates. Under such a structure, the dollar would face depreciation pressure.
This makes FX risk one of the biggest risks for dollar-denominated assets this year. Even if your asset generates returns, currency depreciation could wipe them out. Under such expectations, investors will reprice risk assets and rebalance allocations. Crypto, being tightly dollar-linked and structurally leveraged, would struggle to stay insulated if liquidity stalls or contracts at the margin.
There are additional variables. First, the Bank of Japan remains on a rate-hiking path, meaning global liquidity is not easing in sync. Second, if inflation resurfaces, the Fed will likely proceed more cautiously with rate cuts. Under inflation constraints, liquidity may not improve meaningfully and could even enter a stagnation phase. In this environment, crypto isn’t benefiting from liquidity expansion-it’s competing with other asset classes for limited liquidity. And in the current risk preference hierarchy, investors may prioritize tech equities, particularly AI and computing power-related sectors.
On the other hand, if the dollar undergoes structural depreciation, dollar-denominated commodities-such as gold, silver, and copper-would likely rise. Even with short-term volatility, precious metals and resource assets could perform well over the next year, and U.S. resource stocks may attract capital inflows.
Bringing it back to crypto: the market is currently facing limited liquidity, intense competition for capital, high volatility, and elevated leverage. From a pricing perspective, Bitcoin’s implied forward yield is around 3.6%, while the 10-year U.S. Treasury yields about 4%. In pure yield terms, Bitcoin’s forward premium is actually lower than Treasuries. Ethereum’s forward yield is around 3.3%, close to money market rates. Solana’s one-year premium on CME is just over 1%. This suggests that investors have very conservative forward return expectations for these assets. With muted yield expectations and high volatility, strong performance in this macro environment is hard to justify. The options market reflects the same dynamic-long-term bearish sentiment in both Bitcoin and Ethereum hasn’t meaningfully improved.
So my conclusion is: prepare for prolonged high volatility. The environment facing crypto this year is not one of liquidity expansion, but more likely one of liquidity constraint.
Capital Competition Between Gold, Resource Stocks, and Crypto Assets
Jiami Shidi: I’m into gossip, so when I first saw that article’s headline, I thought it was some earth-shattering revelation. Then I clicked in-80% of it was just rehashing events from 2022. It felt like time travel. The last 20% suddenly pivoted to: “He did so many bad things before, so this current bad thing must also be him.” That logical leap feels weak to me. If a single individual could single-handedly push BTC down nearly 50%, then the asset itself wouldn’t be worth investing in. If one person can manipulate it that easily, we might as well quit the game. So fundamentally, that argument doesn’t hold up.
Back to the market itself. Justin Sun mentioned IGV earlier. In past discussions, we’ve often said that over the long term, the market maintains a positive adoption expectation for Bitcoin-people believe it will gradually gain broader acceptance. But in the short to mid term, as didier said, there’s no clearly visible strong and sustained buying pressure.
From the ETF perspective, after last year’s surge, things have entered a relatively weak phase. Based on U.S. equity ETF history, long-term retention rates are often around 20%, meaning 80% of capital is mobile and subject to redemption. Bitcoin ETFs are still around a 50% retention rate, which essentially means the asset class is transitioning from early-stage hype to maturity. No asset experiences perpetual one-way inflows. Early geeks and OG holders may sit tight, but now capital flows in and out. You can’t expect ETFs to buy forever. Even MicroStrategy’s marginal purchasing power is starting to weaken.
Now let’s compare with IGV. Since around August–September 2024, Bitcoin’s price action has been highly correlated with IGV. You’ll notice that while the broader U.S. equity market hasn’t fallen much, BTC has dropped sharply. But IGV itself fell from 118 to 75-nearly a 40% drawdown. Internally, we’ve joked that long term BTC behaves like a young asset, but in the short to mid term it trades like an “old-school” asset-very similar to weaker software stocks. By contrast, relatively “harder” sectors, like the S&P 500 Information Technology Index, haven’t experienced declines as steep.
So what about the outlook? Historically, at these drawdown levels, buying interest does gradually increase. If we really see 45%, 50%, or even 60% retracements, many investors-based on historical precedent-will be willing to allocate. Personally, I think there will be a psychological “bottoming range.” But as for how high it could rebound, that’s much harder to call. Short- to mid-term upside is difficult to quantify.
For institutions, if your cost basis is low enough, this type of asset actually suits a longer time horizon. You don’t need to constantly time bull or bear cycles-just maintain a BTC-denominated strategy and ride it out. For retail investors, though, there’s no absolute bottom. If I had to suggest a personal strategy, I’d lean toward tiered DCA by price bands.
For example: In the $50K–$60K range, deploy 0.5% of capital daily. In the $40K–$50K range, deploy 1% daily.Stretch the timeline and gradually average down your cost basis.
As for the Jane Street story, I still find it fascinating-an old narrative can go viral on Twitter all over again. It just shows that traffic generation really is an art form.
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