Harvard Cuts Bitcoin by 20%, Makes First Ether Bet

The world's wealthiest university endowment just rewrote its crypto playbook. Harvard University's $56.9 billion fund slashed its bitcoin position by 21% while making its first-ever bet on ethereum. But this isn't about losing faith in digital assets—it's about something more sophisticated.

The Numbers Tell a Story

Harvard Management Company (HMC) purchased nearly 3.9 million shares of BlackRock's ethereum ETF (ETHA), worth approximately $86.8 million. Simultaneously, they sold roughly 1.5 million shares of the bitcoin ETF (IBIT). Despite the reduction, bitcoin remains Harvard's largest publicly disclosed holding at $265.8 million.

The timing coincides with bitcoin's dramatic fall from its October peak of $125,000 to below $90,000 by quarter-end.

It's Not What You Think

This wasn't a panic sell. According to Andy Constan, founder of Damped Spring Advisors, Harvard's move likely reflects the unwinding of a complex arbitrage strategy that many institutions deployed during bitcoin's bull run.

Here's how it worked: Bitcoin treasury companies like MicroStrategy (MSTR) traded at massive premiums to their actual bitcoin holdings. At one point, MSTR hit 2.9x its net asset value (mNAV)—meaning investors paid $2.90 for every $1 of bitcoin the company owned.

Smart money spotted the opportunity. They bought bitcoin ETFs directly while shorting the overvalued treasury companies, betting the premium would narrow. And it did. MSTR now trades at just 1.2x mNAV.

The Great Institutional Exodus

Harvard wasn't alone. SEC filings reveal institutional ownership of bitcoin ETF shares plummeted from 417 million in Q3 to 230 million in Q4. The unwinding was swift and coordinated.

Meanwhile, Harvard boosted positions in Broadcom, TSMC, Alphabet, and Union Pacific while trimming Amazon, Microsoft, and Nvidia. The message: rotation into value plays as growth stocks cool.

The answer will reshape how we think about digital assets' place in institutional portfolios.