Jane Street's BTC Flow: ETF Accumulation or Market Maker Inventory?

This is a quantifiable accumulation event. Jane Street's Q4 2025 filing shows it added 7,105,206 new shares of BlackRock's IBIT ETF, worth $276 million, bringing its total position to 20,315,780 shares worth $790 million. This scale of passive ETF buying is a direct, dollar-denominated bet on Bitcoin's long-term store-of-value narrative.

The firm's broader crypto footprint reinforces this institutional play. Jane Street also disclosed a 5% passive stake in Bitcoin miner Cipher Mining, a move that signals a strategic allocation to the ecosystem's infrastructure. This isn't a speculative trade; it's a calculated, multi-vector exposure to the underlying asset class.

Viewed through a flow lens, this is market-making inventory, not a directional signal. As a lead market maker for IBIT, Jane Street's position likely serves to hedge options risk and manage creation/redemption flows. The sheer size of the holding is a testament to the ETF's operational scale, not necessarily a conviction that Bitcoin's price will rise tomorrow.

The "10AM" Theory: A Market Maker Explanation

The viral "10AM manipulation" theory is a classic case of misreading market structure. The core allegation is that Jane Street uses its massive ETF inventory to sell at 10 AM ET, triggering panic and liquidations to buy back Bitcoin at lower prices. This narrative frames the firm as a directional trader, but the evidence points to a different reality.

Jane Street is a lead market maker for the IBIT ETF. Its 20,315,780 share position is almost certainly delta-hedged inventory, not a bet on price direction. As a market maker, its primary role is to manage options risk and facilitate creation/redemption flows for the ETF. The sheer size of the holding is a function of its operational scale, not a signal to sell.

The 2022 insider trading lawsuit against Jane Street is unrelated to its current Bitcoin ETF holdings. That case involves allegations of front-running TerraUSD collapses, a separate matter from its current role as an IBIT market maker. The "10AM" theory misapplies a speculative, unverified rumor to a firm whose actual function is to provide liquidity and manage risk, not to manipulate prices for its own directional gain.

The Basis Trade Context: A $54B Flow Story

The primary catalyst for the current market is a massive, sustained flow of capital into Bitcoin ETFs. Since the 2024 launch, ETFs have seen net inflows totaling over $54 billion. This initial wave was dominated by fast-money hedge funds executing a simple basis trade: buying spot ETFs while shorting CME futures to capture the spread.

That easy money has now vanished. As the basis trade compressed, with annualized returns falling to around 4% by early February, the incentive to hold spot ETFs disappeared. Hedge funds exited aggressively, with top holders like Brevan Howard slashing their IBIT stakes by 86% and others vanishing from the 13F filings. This retreat has been a key driver of the price collapse, with Bitcoin down 50% from its October peak.

The flow is now shifting. As hedge funds de-risk, longer-term capital is stepping in. The recent $370 million in liquidations highlights the volatility and risk in leveraged crypto positions, but it also underscores the market's transition from speculative, short-term capital to more patient, accumulation-oriented players.