Is Jane Street quietly building a long position in Bitcoin?

Jane Street is one of the biggest buyers and holders of IBIT shares. The exposure to BlackRock’s ETF, however, is not necessarily a bullish position. 

Jane Street, the global trading firm and one of the biggest global market makers, is among the most active buyers and holders of IBIT shares. 

The latest 13-F filings show Jane Street increased its position by 53.78%, holding 20.3M shares valued at $1B. The position has sparked speculation that Jane Street may be long on BTC and accumulates IBIT for exposure. 

Paradoxically, Jane Street has also been accused of suppressing the BTC price to achieve accumulation at a lower range. 

Are Jane Street’s holdings bullish?

IBIT’s holdings should not be seen as a bullish bet on BTC. In the past, Jane Street has increased positions in BTC mining firms, ahead of the AI boom, leading to the conviction that the trading firm is making a bet on BTC and the crypto market. 

The IBIT inventory may be used to back positions that make use of the volatility and sharp downturns of crypto. In this case, the quant trading firm employs much more sophisticated strategies, rather than just buying BTC exposure and waiting for a rally. 

Jane Street has also been mentioned in the narrative that BTC has been deliberately suppressed, which includes daily selling from unknown entities. The daily pattern of selling when the US markets open has led to suspicions that a large fund may be suppressing BTC. 

At this point, it remains unknown who the biggest sellers are, and the crypto market has seen multiple rumors that market makers dump BTC to liquidate leveraged positions. However, Jane Street may not be deliberately suppressing BTC, but instead acting in its best interest, and being able to benefit from the ongoing market slide. 

Jane Street also increased MSTR holdings

Jane Street has also increased its holdings of MSTR common stock, once again raising the question of whether it was making a directional bet. Jane Street increased its MSTR holdings by 16.23% in February.

Jane Street decreased its exposure to MSTR put and call positions, but boosted MSTR holdings by 473% in the last quarter, holding 951,000 shares valued at about $124M. Once again, the position does not indicate a bullish expectation for Strategy, and may be simply inventory management. 

The positions of Jane Street have come under scrutiny, as the company is the target of a lawsuit. Terraform Labs claims Jane Street traded on insider information, exacerbating the de-pegging of UST and precipitating the unraveling of Terra (LUNA). Allegedly, Jane Street gained information from Terraform insiders and was able to sell before the depegging event, leaving retail and other investors to absorb the losses. 

The positions of Jane Street also raise the issue of mainstream funds operating in crypto, potentially being able to sway the market and leave retail holders with major losses.

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