Jane Street Cuts Bitcoin ETF 71% and Doubles Ethereum Bet in Q1 2026

Jane Street’s Q1 2026 13F filing arrived on May 13 with a blunt message: the world’s most profitable trading firm cut its BlackRock iShares Bitcoin Trust (IBIT) stake by 71% in a single quarter — while nearly doubling its Ethereum ETF exposure and adding roughly $82 million across two funds. The move, one of the largest institutional repositionings since spot crypto ETFs launched in the United States, did not happen in isolation. Wells Fargo filed similar disclosures revealing a 63.5% increase in Ethereum ETF holdings during the same period, even as ETH fell nearly 32% in Q1. Combined, the two firms’ repositioning represents hundreds of millions of dollars in directional capital flowing out of Bitcoin products and into Ethereum infrastructure.

What the Q1 2026 13F Filings Revealed

Institutional investment managers holding more than $100 million in U.S. equities must file Form 13F with the SEC within 45 days of each quarter’s end. Q1 2026 closed March 31, making May 15 the filing deadline — and firms began submitting disclosures through the week of May 12.

Jane Street, the quantitative trading firm that posted a record $16.1 billion in Q1 trading revenue, disclosed sweeping crypto portfolio changes in its filing:

• IBIT (BlackRock iShares Bitcoin Trust): Position fell 71% to 5.9 million shares, valued near $225 million at quarter-end
• FBTC (Fidelity Wise Origin Bitcoin Fund): Dropped 60% to 2 million shares, worth approximately $115 million
• ETHA (iShares Ethereum Trust) and FETH (Fidelity Ethereum Fund): Combined additions totaled about $82 million; ETHA position nearly doubled quarter-over-quarter
• MSTR (MicroStrategy): Collapsed 78% from roughly 968,000 shares (~$146 million) to about 210,000 shares (~$27 million), reversing a 473% buildup from Q4 2025

This was not a generalized crypto risk-off move. Jane Street simultaneously raised its Coinbase (COIN) stake from 778,000 to 888,000 shares (~$155 million), grew its Riot Platforms (RIOT) position to 7.4 million shares (~$91 million), and surged its Galaxy Digital (GLXY) stake from just 17,000 shares to 1.5 million shares — from about $380,000 to roughly $28 million in a single quarter. Bitcoin ETFs shrank. Ethereum ETFs grew. Crypto infrastructure equity grew.

The Bitcoin ETF Basis Trade Unwind

Jane Street is primarily a market-making and quantitative arbitrage firm. Its large Bitcoin ETF positions in 2024 and Q4 2025 were almost certainly tied to a cash-and-carry basis trade: buy IBIT at spot, short BTC futures, and capture the premium between the two. When Bitcoin futures traded at 15–20% annualized premia through 2024 and into 2025, this trade generated strong risk-adjusted returns with modest net BTC exposure.

By Q1 2026, Bitcoin had corrected about 24.1% to close near $66,000, and futures premia compressed. The carry narrowed, making the trade less attractive. Trimming the ETF leg as futures positions rolled off was the rational exit from a compressed arbitrage — not necessarily a bearish call on Bitcoin’s long-term trajectory.

The MSTR reversal reinforces this view. Jane Street built its MicroStrategy position by 473% in Q4 2025, when the company’s leveraged Bitcoin treasury model was drawing peak institutional interest and MSTR traded at a significant premium to its underlying BTC. As Bitcoin corrected and that premium compressed, unwinding the leverage proxy followed logically. A 78% reduction in one quarter is textbook de-levering of a trade that had run its course.

Wells Fargo’s Ethereum Conviction Trade

Wells Fargo’s positioning is harder to explain as pure arbitrage — which makes it more strategically significant.

The bank, managing roughly $1.9 trillion across wealth and institutional accounts, raised its ETHA position by 63.5% to 1.1 million shares during a quarter where ETH fell almost 32%. It also increased its Bitwise Ethereum ETF (ETHW) stake by 37% to 257,000 shares, while reducing Bitcoin ETF exposure in the same period.

Wells Fargo’s internal framework treats Ethereum as programmable infrastructure rather than just a speculative asset. Bitcoin is framed as digital gold — a macro-sensitive store of value. Ethereum is framed as a settlement layer for DeFi, tokenized real-world assets (RWAs), and institutional blockchain applications.

From that lens, adding to Ethereum during a 32% drawdown is not simple bottom-fishing. It is accumulating infrastructure at a discount to what the bank expects the network to be worth once institutional RWA settlement volumes scale.

The Outlier: Harvard’s Contrarian Exit

Not all institutions followed the rotation trade. Harvard Management Company — the roughly $50 billion endowment — moved in the opposite direction.

Harvard’s Q1 2026 13F disclosed the complete liquidation of its Ethereum ETF position and a 43% cut to its IBIT holdings — the largest single reduction in crypto exposure the endowment has reported since entering spot ETFs. Harvard was among the first major university endowments to build positions after U.S. approval in 2024.

This divergence highlights structural differences across institutional archetypes. Trading firms and large banks with quarterly P&L horizons can rotate quickly on relative value: ETH looks cheap versus BTC, so add ETH and trim BTC. Endowments manage against 20–30-year liabilities. During a drawdown, their risk committees may reduce crypto as an asset class regardless of token-level nuance.

Harvard’s exit is therefore less a verdict on Ethereum specifically and more a reflection of a different mandate and time horizon.

Jane Street’s Equity Picks Signal Infrastructure Conviction

Jane Street’s equity moves further clarify its view on where durable value sits in the crypto stack.

Positions that increased significantly:

• Riot Platforms (RIOT): From about 5 million to 7.4 million shares (~$91 million) — the largest U.S. public Bitcoin miner by installed hashrate
• Coinbase (COIN): From ~778,000 to ~888,000 shares (~$155 million) — the dominant U.S. regulated exchange with diversified revenue (trading, custody, stablecoins)
• Galaxy Digital (GLXY): From 17,000 shares to 1.5 million shares — roughly $380,000 to about $28 million, an 88x increase in share count

Positions that decreased:

• Reduced stakes in IREN, Cipher Mining, TeraWulf, and Core Scientific — smaller, less diversified miners with revenue tied almost entirely to BTC price and hashrate economics

The pattern is selective, not risk-off. Jane Street kept and expanded positions in diversified infrastructure (Coinbase, Riot, Galaxy) while trimming pure-play hashrate and levered BTC proxies. The portfolio tilts toward businesses with broader moats and multiple revenue lines rather than simple directional BTC beta.

The Glamsterdam Catalyst Looming in June

A key fundamental backdrop for the ETH rotation is Ethereum’s Glamsterdam upgrade, currently targeting a June 2026 mainnet deployment.

Glamsterdam is Ethereum’s most significant upgrade since The Merge, centered on two major EIPs:

• EIP-7732 (Enshrined Proposer-Builder Separation, ePBS): Separates block validation and consensus roles, expanding the data propagation window from ~2 seconds to ~9 seconds and enabling much higher safe throughput.
• EIP-7928 (Block-Level Access Lists, BALs): Enables more parallel transaction processing and prepares Ethereum L1 to safely handle gas limits above 200 million (up from ~60 million today).

The upgrade targets throughput approaching 10,000 TPS and meaningfully lower average gas fees, improving Ethereum’s competitiveness as a settlement layer for institutional tokenized asset platforms.

Both Jane Street and Wells Fargo accumulated ETH exposure in Q1 2026 while Glamsterdam was still in Devnet-4 and Devnet-5 testing. Accumulating near Q1 lows around $2,023 per ETH looks like positioning ahead of a protocol-level catalyst that may not be fully priced by retail. While execution risks remain — especially if additional scope like FOCIL is included — the core EIPs are widely expected to land by mid-2026.

What This Means for Investors

The Q1 2026 institutional rotation from Bitcoin ETFs to Ethereum ETFs does not negate the Bitcoin bull case. It does, however, clarify how sophisticated capital is currently thinking about relative value.

Key takeaways:

• ETH around $2,023 attracted deliberate institutional buying. Jane Street and Wells Fargo added Ethereum exposure into a 32% drawdown, signaling accumulation rather than momentum chasing.
• The Bitcoin basis trade is compressing. Jane Street’s 71% IBIT reduction likely reflects the unwind of a cash-and-carry trade as futures premia normalized, not an outright abandonment of BTC.
• Infrastructure equity is a preferred exposure vehicle. The Galaxy Digital ramp and steady Coinbase accumulation suggest a tilt toward diversified crypto businesses over pure token ETFs.
• Glamsterdam is a live, fundamental catalyst. If Ethereum’s throughput and fee profile improve as planned, the network’s utility and revenue potential for validators and the broader ecosystem could re-rate.
• Institutional flows are heterogeneous. Harvard’s full ETH exit and 43% BTC cut underscore that different institutions — quant firms, banks, endowments — operate under different mandates and time horizons.

For investors tracking 13F filings, the signal is clear: multiple analytically sophisticated institutions bought Ethereum aggressively during a quarter when it fell nearly 32%. Historically, such behavior often precedes the moves that retail participants only recognize in hindsight.