In a significant shift in its investment strategy, Harvard University’s endowment, valued at $56.9 billion, has made its first investment in Ethereum while reducing its exposure to Bitcoin. The latest SEC filing from the Harvard Management Company (HMC) revealed that the university purchased nearly 3.9 million shares of BlackRock’s iShares Ethereum Trust (ETHA), a move valued at approximately $86.8 million.
This transition comes amid the backdrop of a substantial decline in Bitcoin’s value, which fell from an all-time high of around $125,000 in October to just under $90,000 by the end of the quarter. In line with this strategy, Harvard scaled back its holdings in the iShares Bitcoin Trust (IBIT) by 21%, offloading roughly 1.5 million shares. Despite this reduction, the Bitcoin trust remains Harvard’s largest publicly disclosed holding, totaling $265.8 million.
Industry experts, such as Andy Constan, founder and chief investment officer at Damped Spring Advisors, suggest that these moves may reflect broader market dynamics rather than sentiment alone. Constan points out that the sale of Bitcoin shares could indicate an unwinding of profitable trades that capitalized on the high premiums associated with digital asset treasury (DAT) firms at the height of Bitcoin’s price surge.
When Bitcoin values soared, companies like MicroStrategy (MSTR) traded at premiums of approximately 2.9 times their net asset value (mNAV), meaning investors were willing to pay significantly more than the actual value of the Bitcoin the firms held. However, as Bitcoin prices have decreased, the mNAV of these firms has adjusted downward; for instance, MicroStrategy now trades at an mNAV of 1.2—a drastic shift from the previous highs.
Additionally, institutional data compiled by Todd Schneider highlights this trend, indicating that institutions reported ownership of 230 million IBIT shares in the fourth quarter, a decrease from 417 million in the third quarter.
Harvard’s investment strategy is not limited to cryptocurrencies. The university has also made notable investments in major technology companies, increasing stakes in semiconductor giants Broadcom and TSMC, as well as Google’s parent company Alphabet and railroad operator Union Pacific. Concurrently, the institution trimmed its investments in technology stalwarts Amazon, Microsoft, and Nvidia, indicating a strategic pivot amid evolving market conditions.
These adjustments reflect a nuanced approach by one of the world’s foremost academic institutions as it navigates the volatile landscape of digital and traditional assets.
