Bitwise CIO Reveals What’s Really Behind Bitcoin’s Decline and It’s Not Jane Street

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.

“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.

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.