Harvard University’s $56.9 billion endowment made its first foray into the ether last quarter, even as it reduced its exposure to bitcoin .
According to an SEC filing, Harvard Management Company (HMC) bought nearly 3.9 million shares of BlackRock’s iShares Ethereum Trust (ETHA), worth about $86.8 million.
The company also reduced its stake in iShares Bitcoin Trust (IBIT) by 21%, selling about 1.5 million shares. The bitcoin exchange-traded fund remains Harvard’s largest publicly disclosed holding at $265.8 million.
The shift comes after the price of bitcoin fell from a record high of around $125,000 in October to close the quarter just below $90,000.
However, the move may have less to do with sentiment and more to do with market dynamics, according to Andy Constan, founder and chief investment officer at Damped Spring Advisors.
The sale could reflect the unwinding of a trade meant to capitalize on bitcoin treasury companies trading at premiums to the value of their BTC holdings, as measured by the multiple of net asset value, or mNAV, which compares enterprise value to bitcoin value.
As bitcoin’s price boomed, digital asset treasury (DAT) firms like Strategy (MSTR) traded at high premiums to the value of bitcoin in their treasuries. MSTR, for example, at one point traded close to 2.9 mNAV, meaning investors who bought the shares paid about $2.9 to own $1 of BTC.
That premium reflects not only the underlying cash-flow-generating business, but also the company’s potential to keep accumulating bitcoin. Still, various investors are betting that the mNAV gap will narrow. They held bitcoin indirectly through IBIT and shorted the shares of Strategy and similar digital asset treasury (DAT) companies.
Then the relaxation took place, according to Constan. As the price of bitcoin plunged, so did the price of DAT shares. Strategy, for example, is now traded at 1.2 mNAV. Those traders may also be rebalancing their portfolios, as bitcoin’s price nearly doubled last year despite the drawdown, suggesting it could be above the institution’s desired portfolio allocation, he wrote on X.
Data from 13F filings with the SEC collected by Todd Schneider at 13.info supports these points. It shows institutions reported holding 230 million IBIT shares in the fourth quarter, down from 417 million in the third.
Harvard also increased investments in chipmakers Broadcom and TSMC, as well as Google parent Alphabet and rail operator Union Pacific, while reducing stakes in Amazon, Microsoft and Nvidia.
