đĄ About Jane StreetâŚ
Issue 207
âď¸ Welcome to the latest issue of The Informationist, the newsletter that makes you smarter in just a few minutes each week.
đ The Informationist takes one current event or complicated concept and simplifies it for you in bullet points and easy to understand text.
𫶠If this email was forwarded to you, then you have awesome friends, click below to join!
đ And you can always check out the archives to read more of The Informationist.
Todayâs Bullets:
The Firm That Never Tweeted
The Rap Sheet
The Grey Window
What It Means for Your Money
Inspirational Tweet:
If youâve been on Twitter this past week, youâve probably seen one name dominating your feed.
Jane Street.
And unless you work on a trading desk, you probably havenât heard of them.
But the accusations flying around right now are serious. Insider trading in the $40 billion Terra collapse. Rigging the Indian stock market. And manipulating Bitcoinâs price. Every single morning. At 10 AM.
The entire street has been buzzing about it. Even backstage at the Strategy Conference this past week, Michael Saylor, Phong Le, and Shirish Jajodia, Strategyâs head of treasury and the man executing their capital markets activity, and I were talking about it, trying to separate whatâs real from whatâs noise.
And these arenât just Twitter conspiracy theories. Regulators in India have already issued a 105-page enforcement order. A bankruptcy estate filed a lawsuit in federal court. And now, legitimate questions about Bitcoin ETF mechanics are surfacing that go well beyond one firm.
So who is Jane Street? What exactly are they accused of? How do the Bitcoin ETF mechanics actually work? And what does any of this mean for your portfolio?
Fair questions. And ones weâre going to answer, nice and easy as always, here today.
So, pour yourself a big cup of coffee and settle into your favorite seat for a deep dive into the world of Jane Street with this Sundayâs Informationist.
**Please note: This newsletter was written before the weekend conflict in Iran. The prices and movements referenced are as of Fridayâs market close.
Partner spot
The cracks in the foundations of money are becoming harder to ignore. Persistent deficits, rising debt, and central bank behavior are quietly reshaping how investors think about preservation and risk.
In my latest report, The Debasement Trade, I walk you through:
Why debasement is structural, not cyclical
How inflation and financial repression challenge familiar portfolios
Why gold tends to move firstâand bitcoin often moves further
You can download the report here:
đ˘ The Firm That Never Tweeted
Letâs start with who weâre dealing with. Get a sense of the players and the scene, shall we?
Jane Street was founded in 1999 by four traders who left Susquehanna International Group, one of the original quant powerhouses on Wall Street. Tim Reynolds. Rob Granieri. Marc Gerstein. Michael Jenkins.
They hung a shingle in New York and built something deliberately opaque. No CEO. No corporate hierarchy. Only about 40 people hold equity. The other 3,000 or so employees are compensated handsomely for keeping their heads down and their mouths shut.
How much are they paid, you ask?
Estimates put the average Jane Street trader compensation at about $900,000 per year.
Nice gig.
Though, one former employee has described the culture as an âanarchist commune.â
Hmmm. Noted.
Now the big numbers.
In 2024, Jane Street generated $20.5 billion in net trading revenue. Profit margins above 70%. They handle roughly 10% of all US equity trades. 14% of all US ETF trading volume. And nearly a quarter of all primary market Authorized Participant activity.
Weâll come back to that last one. It matters.
A lot.
Their Twitter account has 16,000 followers. They follow nobody. And check this out.
Some Twitter detectives have speculated that they recently deleted their entire history.
Fact is, they have never posted a single tweet. Not deleted. Never posted. Thatâs a $20 billion revenue firm that has, quite literally, never said a word publicly on social media.
Interesting.
Also, you may recognize a former employee. Sam Bankman-Fried worked at Jane Street before leaving to start Alameda Research and FTX.
Well, well, well. But it gets better.
In 2022, FTX invested $500 million in a little AI startup called Anthropic. Before the AI boom. Before ChatGPT. When FTX went bankrupt, those shares hit the auction block.
Who bought them?
Jane Street. $100 million worth.
Fast forward to today. Anthropic just raised at a $380 billion valuation. Some quick math tells us that $100 million stake is worth somewhere north of $3 billion.
Holy Mother of God.
So Jane Street knows how to make money. No argument there.
What is in dispute is how some of that money gets made.
Over the past year, three separate stories have emerged. A regulator in India documented a pattern of index manipulation. A bankruptcy estate filed a lawsuit alleging insider trading in the Terra collapse. And traders, myself included, have been watching a pattern in Bitcoinâs price that raises structural questions about how ETFs interact with the spot market.
India is the furthest along. SEBI issued its order and Jane Street posted $566 million in escrow while the appeal plays out.
Terra is an active lawsuit filed last week in federal court. Jane Street says the claims are baseless.
Uh huh, we will see.
Back to the Bitcoin ETF question, which is structural. No regulator has made any allegation. But the mechanics absolutely deserve a close look.
Three stories. Three different stages. Letâs walk through each.
