Jane Street Speculation Renews Scrutiny of Bitcoin ETF Market Mechanics

In brief

• Bitcoin ETF shares can be created or redeemed by authorized participants without requiring instant purchases or sales of Bitcoin on public exchanges.
• Analysts say derivatives hedging and settlement timing can weaken the short-term link between ETF inflows and spot price movements.
• The mechanics are legal and widespread across ETF market makers, but may shift price discovery toward futures markets during periods of heavy institutional flow.