Opinion: The price of Bitcoin will not be explicitly suppressed by ETF approval participation institutions, but the price discovery mechanism may be affected.

On February 26, the ongoing discussion about Bitcoin ETF mechanisms triggered by market manipulation rumors involving Jane Street continued to intensify. Bitwise advisor Jeff Park stated that whether Bitcoin’s price is being suppressed by Jane Street is not an issue directed at a single institution but is instead determined by the structural features within the Bitcoin ETF framework. Each authorized participant (AP), including Jane Street Capital, JPMorgan, Goldman Sachs, and others, has the exemption to create and redeem ETF shares, allowing them to flexibly operate positions in the market, including using futures or derivatives for hedging, without necessarily purchasing spot Bitcoin, which could influence the price discovery mechanism. This gray area of operation stems from regulatory exemptions and SEC approval for physical delivery. Although there is no evidence that any AP explicitly suppresses Bitcoin prices, the existing structure may alter the natural price formation process, warranting attention from regulators and investors. Bloomberg ETF analyst Eric Balchunas responded, saying that this mechanism is indeed difficult to understand, and he is curious about who or what forces are behind the “patterned sell-offs” that appear daily and then suddenly disappear. Bitcoin technology company Jan3 CEO Samson Mow stated that becoming an AP is not the only factor in price suppression strategies; the key is how extensive their undisclosed trading and hedging activities are. This is a channel that brings capital costs close to zero.