In January 2024, when U.S. regulators approved the first spot Bitcoin exchange-traded funds, it marked a historic convergence. Bitcoin, once the province of fringe cryptographers and libertarian idealists, had been formally integrated into the machinery of Wall Street. Within months, tens of billions of dollars flowed into these vehicles, transforming not just how investors accessed Bitcoin, but how its price was discovered, transmitted, and, increasingly, questioned.
By early 2025, a thread posted on the social platform X by the account “1914ad” ignited controversy within crypto circles. The post alleged that Jane Street, one of the world’s most sophisticated trading firms and a dominant ETF market maker, had gained structural advantages through its role in Bitcoin ETFs—advantages that, according to the thread’s author, allowed it to extract enormous profits while reshaping Bitcoin’s market dynamics.
The claims struck a nerve because they touched on a deeper fear: that Bitcoin, designed to operate outside traditional finance, had become subject to the same forces of institutional liquidity provision, arbitrage, and profit maximization that govern every other major financial asset.
Understanding whether those fears are justified requires separating allegation from architecture, speculation from mechanism, and ideology from economics.
The Role of Market Makers
At the center of the controversy lies a little-understood but essential function: market making.
Market makers exist to provide liquidity. In practice, this means continuously quoting both buy and sell prices for an asset, allowing other participants to trade without waiting for a counterparty.
Jane Street, founded in 2000, is widely recognized as one of the most technologically advanced trading firms in the world. It plays a central role in exchange-traded funds across global markets. Its involvement in Bitcoin ETFs was neither unusual nor secret. Major ETF issuers—including BlackRock, Fidelity, and others—depend on firms like Jane Street to ensure their funds trade smoothly.
Market makers profit primarily from spreads—the small difference between buying and selling prices—and from arbitrage, which involves exploiting price differences between related markets.
This is not manipulation. It is infrastructure.
Without market makers, ETFs would not function efficiently.
How Bitcoin ETFs Actually Work
Spot Bitcoin ETFs introduced a mechanism called “creation and redemption,” which links the ETF’s price to the underlying Bitcoin market.
When ETF demand rises above supply, authorized participants—typically trading firms like Jane Street—can create new ETF shares by purchasing Bitcoin and delivering it to the fund. In return, they receive ETF shares, which they sell to investors.
When demand falls, the reverse occurs: ETF shares are redeemed, and Bitcoin is withdrawn and sold.
This process keeps the ETF’s price aligned with Bitcoin’s market value.
It also creates arbitrage opportunities.
If Bitcoin trades at $60,000 but ETF shares imply a price of $60,500, a market maker can buy Bitcoin and sell ETF shares, capturing the difference.
These profits are typically small per transaction but can accumulate into significant sums over time due to volume.
Structural Advantage or Structural Function?
The X thread’s central allegation was that market makers gained disproportionate profits and influence through their privileged access to ETF creation and redemption.
This allegation reflects a misunderstanding common among observers unfamiliar with ETF mechanics.
Market makers do not receive Bitcoin at preferential prices.
They acquire Bitcoin in the open market, just like any other participant.
Their advantage lies not in price access but in speed, scale, and efficiency.
They operate with:
- Ultra-fast trading systems
- Sophisticated pricing algorithms
- Direct exchange connectivity
- Massive balance sheets
These capabilities allow them to identify and execute arbitrage opportunities faster than others.
But speed is not manipulation. It is competition.
The Real Source of Market Maker Profit
Market makers profit because they reduce risk for others.
Every time an investor buys or sells ETF shares, someone must stand ready to take the opposite side.
Market makers absorb that risk.
Their compensation is the spread and arbitrage margin.
This system exists across all ETF markets, including those tracking:
- The S&P 500
- Gold
- Oil
- Foreign currencies
Bitcoin ETFs are no exception.
The profits may be large in aggregate, but they are earned through volume and efficiency, not secret extraction.
Bitcoin’s Price Declines and Institutional Blame
The X thread emerged during a period of Bitcoin price volatility.
Bitcoin fell significantly at various points in 2024 and 2025, triggering anxiety among retail investors.
In crypto culture, price declines often generate suspicion of institutional interference.
But price movements have complex causes.
Major drivers included:
- Profit-taking after ETF-driven rallies
- Changes in macroeconomic conditions
- Interest rate expectations
- Regulatory developments
- Miner selling
- Long-term holder liquidation
There is no verified evidence that ETF market makers caused Bitcoin’s declines.
In fact, ETFs often increase price stability by deepening liquidity.
The Irony of Institutional Success
Bitcoin was created in response to the 2008 financial crisis, designed as a decentralized alternative to traditional finance.
Its creator, Satoshi Nakamoto, envisioned a system free from centralized control.
Yet Bitcoin’s success made institutional adoption inevitable.
Large investors demand regulated, familiar vehicles.
ETFs provided exactly that.
Institutional participation brought:
- Greater liquidity
- Broader investor access
- Increased legitimacy
It also brought Wall Street’s profit motives.
This was not a betrayal of Bitcoin’s design.
It was the consequence of its success.
No Evidence of Manipulation
Despite the viral nature of the X thread, there is no public evidence that Jane Street manipulated Bitcoin markets.
Jane Street operates under strict regulatory oversight.
ETF market making is governed by:
- SEC regulations
- Exchange rules
- Compliance requirements
Market manipulation would expose firms to severe legal consequences.
Historically, market makers have occasionally been fined for violations in various markets—but there is no verified case proving systemic manipulation of Bitcoin ETFs by Jane Street.
Extraordinary claims require extraordinary evidence.
None has been presented.
The Psychological Dimension
The controversy reflects a deeper tension within Bitcoin’s identity.
Bitcoin was designed to eliminate intermediaries.
Yet its integration into ETFs created new intermediaries.
This transformation altered how Bitcoin is owned and traded.
Many ETF investors never hold Bitcoin directly.
They hold shares.
This shift introduces abstraction.
Ownership becomes financial, not physical.
For some Bitcoin purists, this represents a philosophical loss.
What Actually Changed
Bitcoin itself did not change.
Its network still operates according to its original rules.
Supply remains fixed.
Transactions remain decentralized.
What changed was the layer above Bitcoin—the financial system surrounding it.
ETFs did not alter Bitcoin’s code.
They altered its accessibility.
And accessibility transformed its investor base.
The Scale of Institutional Presence
By 2025, Bitcoin ETFs held hundreds of thousands of Bitcoin.
This concentration raised concerns about institutional influence.
But ownership concentration alone does not equal control.
ETF providers cannot change Bitcoin’s protocol.
They cannot create new coins.
They cannot alter its monetary policy.
Their influence is financial, not technical.
The Reality of Financialization
Bitcoin has become financialized.
This process has happened to every successful asset class.
Gold underwent the same transformation.
Gold ETFs, futures, and derivatives now dominate gold trading.
Yet gold itself still exists physically.
Bitcoin’s financialization follows a similar pattern.
Financial instruments increase efficiency.
They also increase complexity.
Why Market Makers Are Essential
Without market makers:
- ETF prices would deviate from Bitcoin’s value
- Liquidity would collapse
- Trading would become inefficient
Market makers ensure price alignment.
Their presence stabilizes markets.
They do not control Bitcoin.
They facilitate its trade.
The Persistence of Suspicion
Crypto culture emerged from distrust of financial institutions.
This distrust remains powerful.
Institutional involvement triggers suspicion.
Especially when prices fall.
But suspicion alone does not prove wrongdoing.
Financial markets are driven by incentives.
Market makers pursue profit.
Profit seeking is not inherently unethical.
It is foundational to markets.
The Bigger Truth
Bitcoin’s integration into Wall Street represents neither corruption nor conspiracy.
It represents maturation.
Bitcoin is no longer an outsider asset.
It is part of global finance.
This transition brings:
- Legitimacy
- Liquidity
- Institutional participation
It also brings complexity.
And controversy.
The System Bitcoin Entered
Bitcoin did not remain outside the financial system.
It became part of it.
This was inevitable.
Any asset worth trillions attracts institutional infrastructure.
Market makers followed opportunity.
Not ideology.
Their presence reflects Bitcoin’s scale.
Not its failure.
Conclusion: Infrastructure, Not Conspiracy
The claims in the viral X thread reflect real anxieties—but not proven facts.
Market makers like Jane Street play a central role in Bitcoin ETFs.
They profit from arbitrage and liquidity provision.
But this role is structural, not conspiratorial.
Bitcoin’s price remains governed by supply, demand, and macroeconomic forces.
Not secret extraction.
Bitcoin was designed to operate without trust.
Ironically, its success now requires trust in institutions that help investors access it.
The revolution did not disappear.
It evolved.
Bitcoin remains what it has always been:
A decentralized network.
Surrounded now by the machinery of global finance.
Not controlled by it.
But no longer separate from it.
