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Crypto World

Quantum Fears, Not Jane Street, Behind Bitcoin Drop

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How Real Is the Threat?

Bitcoin’s (BTC) downturn has spurred conspiracy theories around alleged market manipulation by firms. However, Bitwise’s Chief Investment Officer (CIO), Matt Hougan, argues that the primary reasons are more straightforward.

This narrative highlights the ongoing debate about what drives major crypto market moves, whether it’s institutional strategies, technological threats, or fundamental market cycles.

Why is Bitcoin’s Price Dropping?

Hougan addressed widespread speculation on social media that Bitcoin’s drop was the result of coordinated moves. BeInCrypto previously reported that some users made allegations against Binance.

More recently, some community members pointed to recurring patterns such as the alleged “10 AM Bitcoin dump” by Jane Street. The executive dismissed these narratives directly, calling the actual explanation “far more boring” than the theories suggest.

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“The conspiracy theories are wild. First it was Binance and then it was Wintermute and then it was an unknown offshore macro hedge fund and then it was paper bitcoin and. today it is Jane Street and next week it will be someone else,” he said.

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Hougan said the “real reason Bitcoin is down” is that long-term holders have been reducing exposure. According to him, investors cut positions by selling spot Bitcoin, closing leveraged trades, and writing covered calls, creating downward pressure on the price.

The Bitwise CIO attributed selling behavior to three factors:

  • The four-year market cycle theory.
  • Concerns surrounding quantum computing.
  • Capital rotation from crypto into artificial intelligence (AI) startups.

The quantum computing discussion has gained traction in the crypto community recently. While MicroStrategy co-founder Michael Saylor recently downplayed concerns about quantum risks, some investors remain cautious.

Kevin O’Leary, the Canadian businessman and Shark Tank investor, has warned that institutional investors are capping Bitcoin allocations at around 3% until the industry demonstrates a credible solution to quantum vulnerabilities. Jefferies’ global head of equity strategy, Christopher Wood, went further, removing a 10% Bitcoin allocation from the model portfolio over the same concerns.

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Crypto Winter’s Timeline and Prospects for Recovery

Meanwhile, Hougan added that most of the selling is likely complete. He claimed that Bitcoin is in the “process of bottoming” and could eventually reach new all-time highs. According to him,

“This is a classic crypto winter and there will be a classic crypto spring.”

Hougan previously stated that the current crypto winter began in January 2025, and given the 13-month historical duration, the end could be near.

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On-chain analyst Willy Woo offered a more nuanced view. He said the recent sell-off appears exhausted but cautioned that deteriorating spot and futures liquidity could cap any near-term rebound.

Woo’s timeline places the end of bearish conditions in Q4 2026, with bullish momentum potentially returning in Q1 or Q2 2027.

“~45k would be a typical bear market bottom. BTC has only ever existed in a secular global macro bull market 2009-2026. If global macro breaks down, then 30k is the fall back level of support, 16k as the final line to maintain BTC’s bull trend,” Woo wrote.

The distance between these timelines reflects a broader uncertainty about where exactly the market sits in its cycle. What analysts broadly agree on is that Bitcoin’s current weakness reflects structural and psychological forces, not manipulation.

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Crypto World

CFTC Staff Share FAQ on Crypto Collateral

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CFTC Staff Share FAQ on Crypto Collateral

The US Commodity Futures Trading Commission has given more details on its expectations for the use of crypto as collateral amid a pilot program that the agency launched last year.

In a notice on Friday, the CFTC’s Market Participants Division and Division of Clearing and Risk responded to frequently asked questions that emerged from two staff letters issued in December that established a pilot allowing crypto to be used as collateral in derivatives markets.

The notice reminded futures commission merchants wanting to take part in the pilot that they must file a notice with the Market Participants Division “which includes the date on which it will commence accepting crypto assets from customers as margin collateral.”

The crypto industry has argued that crypto technology is best suited for 24-7 trading and instant settlement, and the CFTC’s guidance in December clarified what tokenized assets can be used as collateral, along with how to value them and calculate how much is needed for a trading position.

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CFTC aligns guidance with SEC

The CFTC made clear its guidance was to align with the Securities and Exchange Commission, as the two agencies work together on a regulatory framework for crypto.

The CFTC said that capital charges, the amount that must be held to cover losses, would be “consistent with the SEC” and that futures commission merchants should apply a 20% capital charge for positions in Bitcoin (BTC) and Ether (ETH), while stablecoins should get a 2% charge.

Source: Mike Selig

The notice added that futures commission merchants taking part in the pilot can only accept Bitcoin, Ether, or stablecoins for the first three months and must give prompt notice of any significant cybersecurity or system issues. They must also file weekly reports of the total crypto held across customer account types.

After the three-month period, other cryptocurrencies can be accepted as collateral and the reporting requirements will end.

Related: SEC interpretation on crypto laws ‘a beginning, not an end,’ says Atkins

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The notice also clarified that “only proprietary payment stablecoins may be deposited as residual interest in customer segregated accounts” and that futures commission merchants can’t accept other cryptocurrencies for that purpose.

The CFTC said that crypto and stablecoins cannot be used for collateral of uncleared swaps, but swap dealers can use tokenized versions of an eligible asset if it meets regulatory requirements and grants the holder the same rights in its traditional form.

Meanwhile, derivatives clearing organizations can accept crypto and stablecoins as initial margin for cleared transactions if they meet CFTC requirements regarding minimal credit, market, and liquidity risks.

Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026

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