People in the crypto market are once again discussing how big institutional trading firms might influence major price swings. After the large liquidation event on October 10, which was one of the biggest in recent crypto history, many are now focusing on Jane Street.

Jane Street, a major quantitative trading firm, has recently come under regulatory scrutiny in several countries. Its strong presence in ETF market making has also put it at the center of discussions about how markets work.

• The Firm at the Center
• Context from Terra and Past Crashes
• ETF Market Making and Institutional Flows
• How Liquidation Cascades Actually Work

The Firm at the Center

Jane Street is one of the biggest quantitative trading firms worldwide. The company trades in stocks, bonds, derivatives, and now more often, digital assets. It is well known for providing liquidity in ETFs and using arbitrage strategies, making it one of the most influential trading firms on Wall Street.

Recently, Jane Street reportedly made about 10 billion dollars in trading revenue in just one quarter. The firm has also faced regulatory action in India over claims of index manipulation. Lately, it has come up in legal talks related to the collapse of the Terra ecosystem.

Jane Street has also been active in market making for BlackRock’s iShares Bitcoin Trust, which is one of the largest spot Bitcoin ETFs. The firm clearly has a major role in global liquidity.

On October 10, 2025, about $19 billion in crypto derivatives were liquidated in just 24 hours. The rapid selloff surprised many traders.

Bitcoin’s price fell quickly, and other major altcoins dropped as well, wiping out many leveraged positions on different exchanges. Open interest fell sharply as forced liquidations spread through perpetual futures markets.

Funding rates changed sharply, showing panic and sudden deleveraging. Within days, however, the market rebounded. Bitcoin reversed multiple red weekly candles and total crypto market capitalization expanded significantly.

The Terra collapse in May 2022 remains one of the most devastating episodes in crypto history. When Terra’s algorithmic stablecoin lost its peg, roughly 40 billion dollars in value evaporated within days.

The collapse triggered forced liquidations, fund insolvencies, and months of broader market stress. During periods like that, large trading firms, including quantitative market makers, are highly active as they manage risk and arbitrage price discrepancies.

However, volatility during structural failures does not automatically imply orchestration. Excessive leverage combined with thin liquidity has repeatedly proven sufficient to trigger dramatic collapses without coordinated action.

ETF Market Making and Institutional Flows

More institutions have joined the crypto market since spot Bitcoin ETFs were approved. Companies like Jane Street provide liquidity for these ETFs, helping create and redeem shares while managing their risk in the underlying markets.

ETF market makers usually use neutral strategies. They make money from the difference in prices and arbitrage, not from betting on price direction. But when the market is very volatile, they might widen spreads or lower their exposure to control risk.

When there is less liquidity and a lot of leverage, price moves can become bigger. This can make liquidation cascades worse, even if no one is trying to manipulate the market. Large institutions do change how the market works, but that does not always mean they have bad intentions.

🚨IS JANE STREET ALSO BEHIND THE OCTOBER 10TH CRASH, THE LARGEST LIQUIDATION EVENT IN CRYPTO HISTORY?

Look at the pattern.

Jane Street:

• Made $10B in trading revenue in a single quarter, more than major Wall Street banks.
• Banned from India’s markets after regulators… https://t.co/MT35kBYxFd pic.twitter.com/D7WwthsHbC

— Bull Theory (@BullTheoryio) February 25, 2026

How Liquidation Cascades Actually Work

Crypto markets are uniquely reflexive due to leverage. When traders use high leverage in perpetual futures, even small price moves can trigger forced liquidations.

Once liquidation engines begin executing market orders, those sales push prices further down. The drop triggers additional liquidations, creating a feedback loop. Within minutes, billions can evaporate.

In modern crypto markets, retail participants are no longer the only major actors. Large quantitative firms, hedge funds, ETF issuers, and institutional desks now provide substantial liquidity.

When massive liquidation events occur, attention naturally turns toward firms with the scale to move billions. Jane Street fits that profile due to its global footprint and active role in ETF markets.

Liquidity providers can unintentionally intensify volatility simply by reducing exposure during periods of stress. Risk management decisions made simultaneously across firms can create sharp price gaps.

However, there is currently no verified public evidence directly linking the firm to orchestrating the crash. Crypto markets remain structurally vulnerable to leverage driven cascades.

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