Harvard University’s $56.9 billion endowment has made its first foray into the ether last quarter, even though it reduced its exposure to bitcoin .
According to an SEC filing, Harvard Management Company (HMC) purchased nearly 3.9 million shares of BlackRock’s iShares Ethereum Trust (ETHA), valued at approximately $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 move comes after the price of bitcoin fell from an all-time high of around $125,000 in October to close the quarter just below $90,000.
That move, however, 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 unraveling of a transaction aimed at capitalizing on Bitcoin cash companies trading at premiums to the value of their BTC holdings, measured by the multiple of net asset value, or mNAV, which compares the company’s value to the value of Bitcoin.
When the price of bitcoin was booming, digital asset treasury (DAT) companies like Strategy (MSTR) were trading at high premiums to the value of bitcoin in their treasuries. MSTR, for example, at one point traded at nearly 2.9 mNAV, meaning investors buying the shares were paying around $2.9 to own $1 worth of BTC.
This premium reflects not only the underlying cash-generating business, but also the company’s potential to continue accumulating bitcoin. Still, various investors are betting on this mNAV gap closing. They held bitcoin indirectly through IBIT and shorted shares of Strategy and similar digital asset treasury (DAT) companies.
Then the denouement took place, according to Constan. As the price of bitcoin fell, so did that of DAT stock. The strategy, for example, is now trading at 1.2 mNAV. These traders could also rebalance their portfolios, as the price of bitcoin nearly doubled last year despite the pullback, suggesting it could be above the institution’s desired portfolio allocation, he wrote on X.
Data from SEC 13F filings collected by Todd Schneider at 13.info confirms these points. It shows that institutions reported holding 230 million IBIT shares in the fourth quarter, up from 417 million in the third.
Harvard also increased its investments in chipmakers Broadcom and TSMC, as well as Google parent Alphabet and rail operator Union Pacific, while reducing its stakes in Amazon, Microsoft and Nvidia.
