Bitcoin Pumps 6% as Jane Street Lawsuit Shakes Up Crypto Markets

What Just Happened

Bitcoin ripped from under $63,000 to nearly $68,000 in a single day. Ethereum jumped close to 5%, pushing back toward $1,935. Solana led the altcoins with a 6% surge. The total crypto market cap climbed to $2.27 trillion, up roughly 3% in 24 hours.

This came after weeks of pain. Bitcoin had been grinding lower since early February, dropping from around $88,000 to the low $60,000s. The Fear and Greed Index was sitting at "Extreme Fear" with a reading of just 5. Sentiment was as bad as it gets.

Then on February 23, a lawsuit dropped that changed the narrative overnight.

The Jane Street Lawsuit Explained

Terraform Labs' bankruptcy administrator Todd Snyder filed a lawsuit in Manhattan federal court against Jane Street Group, one of Wall Street's most powerful and secretive high-frequency trading firms.

The allegations are serious. The lawsuit claims Jane Street used insider information to front-run trades during the May 2022 Terra Luna collapse, the event that wiped out roughly $40 billion in crypto value and triggered a chain reaction that eventually brought down FTX.

Here is what the complaint alleges happened. On May 7, 2022, Terraform Labs quietly withdrew $150 million in UST from the Curve Finance liquidity pool. Within 10 minutes, a wallet linked to Jane Street pulled out an additional $85 million in UST. The public had no knowledge of either move at the time. This concentrated selling pressure allegedly pushed Terra's UST stablecoin off its dollar peg, triggering the death spiral that destroyed both UST and its sister token LUNA within days.

The lawsuit claims the insider connection came through Bryce Pratt, a former Terraform Labs intern who later joined Jane Street as a trader. Pratt allegedly maintained a private messaging channel nicknamed "Bryce's Secret" with Terraform's business development team, giving Jane Street access to material non-public information about Terra's liquidity plans.

On May 9, as UST was already slipping, Pratt reportedly sent a group message to Do Kwon and Terraform staff expressing interest in buying Bitcoin or LUNA. The complaint describes this less as a rescue offer and more as a firm positioning itself while holding all the cards.

Jane Street reportedly avoided over $200 million in potential losses during the collapse while retail investors absorbed devastating, largely unrecoverable damage.

Jane Street has denied everything, calling the lawsuit "desperate" and "baseless," arguing that losses suffered by Terra and Luna holders were the result of fraud by Terraform's own management. Do Kwon did plead guilty to criminal charges and was sentenced to 15 years in prison, so there is truth to that defence. But the question the lawsuit raises is whether Jane Street accelerated the destruction while profiting from it.

The 10 AM Dump Pattern

The lawsuit has also thrown a spotlight on something crypto traders have been complaining about for months: the "10 AM dump."

Since late 2025, traders noticed a recurring pattern where Bitcoin would sell off sharply around 10 AM Eastern Time, right at the US stock market open. Charts from December showed BTC dropping from $89,700 to $87,700 within minutes, wiping out $171 million in leveraged long positions before recovering. This happened day after day.

The theory circulating in crypto circles is that Jane Street, as an authorized participant in major Bitcoin ETFs like BlackRock's IBIT, was using its position to sell BTC at the market open, trigger liquidations, and then buy back at lower prices. Jane Street held nearly $2.5 billion in IBIT at one point, making it one of the largest holders of the Bitcoin ETF.

None of this is proven. These are allegations and market observations, not confirmed facts. But here is what is interesting: on February 25, the day after the lawsuit became public, the 10 AM dump did not happen. For the first time in weeks, Bitcoin moved higher through the US open instead of selling off.

Coincidence or not, the market noticed.

Why Bitcoin Pumped

Multiple factors came together.

The Jane Street lawsuit shifted the narrative. If the "10 AM dump" theory holds any weight, the public attention from the lawsuit may have paused the selling pattern, at least temporarily. Traders who had been front-running the expected dip by going short were suddenly caught on the wrong side.

That triggered a massive short squeeze. Over $323 million in leveraged positions were liquidated in 24 hours. When short sellers get liquidated, they are forced to buy back their positions, which pushes the price up further, which liquidates more shorts. It becomes a feedback loop.

Institutional money was already buying. US Spot Bitcoin ETFs recorded a net inflow of $257.7 million on Tuesday, the highest single-day inflow since early February. While retail was in "Extreme Fear," smart money was accumulating.

Macro conditions helped too. Cooling inflation data and positive signals from the broader economy lifted risk appetite across equities, which spilled over into crypto.

The result was Bitcoin's biggest single-day move in weeks. Whether this is the start of a sustained recovery or a relief bounce in a larger downtrend remains to be seen. Bitcoin still needs to flip the $69,500 level into support for the bulls to take control, and the Fear and Greed Index is still deep in fear territory.

What This Means for Crypto Bettors

If you are holding crypto and betting with it, price pumps like this have a direct impact on your bankroll.

A 6% jump in BTC means every satoshi in your BlockBet wallet just got 6% more valuable in dollar terms. If you had 0.1 BTC deposited, that is roughly $400 more in purchasing power overnight without placing a single bet. ETH and SOL holders saw similar gains.

This is one of the unique advantages of betting with crypto. Your bankroll is not static. When the market moves in your favour, your betting capital grows with it. The flip side is obviously true during downturns, which is why keeping an eye on market conditions matters.

A few practical moves during volatile periods like this.

First, consider diversifying your deposits across stablecoins and volatile assets. Holding some USDT or USDC in your BlockBet balance keeps a portion of your bankroll steady regardless of what BTC or ETH does. BlockBet supports 10 cryptocurrencies including both stablecoins and majors.

Second, use the volatility to your advantage in live betting. Big market moves tend to come with increased activity and attention across sports and crypto markets. More eyeballs mean more betting action and potentially sharper line movements to exploit.

Third, remember that instant withdrawals matter most during volatility. If you want to take profit on your crypto gains, you need a platform that lets you move fast. BlockBet processes withdrawals instantly, so you are not stuck waiting 48 hours while the market gives back everything.

And every dollar you wager - whether the market is pumping or dumping - earns Store Points at BlockBet. One dollar wagered equals one point, redeemable for real items from tech to gift cards to a Tesla Cybertruck. Your bets are always working for you beyond just the win or loss.