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 iShares Ethereum Trust (ETHA) from BlackRock, valued at around $86.8 million.
The company also reduced its stake in iShares Bitcoin Trust (IBIT) by 21%, selling approximately 1.5 million shares. The bitcoin exchange-traded fund remains Harvard’s largest publicly disclosed holding at $265.8 million.
The change 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.
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 of Damped Spring Advisors.
The sale could reflect the unwinding of a deal that sought to capitalize on bitcoin treasury companies that trade at premiums to the value of their BTC holdings, measured by the multiple of net asset value, or mNAV, which compares the value of the company 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 was trading around 2.9mNAV, meaning investors who bought the stock were paying around $2.9 to own $1 of BTC.
That premium reflects not only the underlying cash-generating business, but also the company’s potential to continue accumulating bitcoin. Still, several investors are betting that this mNAV gap will narrow. They held bitcoins indirectly through IBIT and shorted the shares of Strategy and similar digital asset treasury (DAT) companies.
Then relaxation occurred, according to Constan. As the price of bitcoin plummeted, so did that of DAT stock. The strategy, for example, now trades at 1.2mNAV. These traders may also be rebalancing their portfolios, as the price of bitcoin nearly doubled last year despite the drawdown, suggesting it could be above the institution’s desired portfolio allocation, he wrote in X.
Data from 13F SEC filings compiled by Todd Schneider at 13.info supports 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 boosted investments in chipmakers Broadcom and TSMC, as well as Google parent Alphabet and rail operator Union Pacific, while cutting its stakes in Amazon, Microsoft and Nvidia.
