Harvard University Sold Some Bitcoin and Ethereum in Q1. Should You?

When one of the world's wealthiest universities makes an apparently sudden and unexpected reshuffle of its crypto holdings, it tends to make a splash. On that note, Harvard's endowment fully liquidated its $87 million Ethereum (CRYPTO: ETH) exchange-traded fund (ETF) position in the first quarter of this year, and slashed its stake in its Bitcoin (CRYPTO: BTC) vehicle, the iShares Bitcoin Trust, (NASDAQ: IBIT) by 43%. The Ethereum holding only lasted a single quarter.

But before you start to second-guess your own Bitcoin or Ethereum positions based on this, it's worth understanding whose playbook Harvard is running, so let's dive in.

Image source: Getty Images.

Endowments aren't oracles

The most important dimension to pay attention to is that the timing of Harvard's sales overlaps with a coming leadership transition.

N.P. Narvekar, who runs the endowment today and is the architect of its crypto foray, has reportedly told the board he plans to retire by late 2027. When the person who championed an aggressive strategy (for a conservative institution like an endowment) is headed for the door, it's understandable for the portfolio to tilt back toward conventional assets.

Endowments also operate under all sorts of rules that individual investors don't face. Harvard's endowment funds roughly a third of the university's $6.7 billion annual budget, so rebalancing can sometimes be driven by internal institutional mandates rather than long-term reasoning about the investments themselves.

In other words, Harvard's sales aren't a red flag for either Ethereum or Bitcoin.

What this means for your holdings

If you own Bitcoin or Ethereum in any form, including through Bitcoin ETFs and similar products, Harvard's sales shouldn't alter your thesis. An endowment rebalancing around a leadership change is not the same as the market discovering something negative about either asset.

Bitcoin's fundamentals are unchanged. The iShares Bitcoin Trust has attracted more than $57 billion in cumulative net inflows since launching in January 2024. That infrastructure for enabling more demand for Bitcoin didn't exist two years ago, and it's working exactly as designed, drawing more capital to the coin over time.

Ethereum's situation is more complicated. The coin is down more than 57% from its all-time high, and it's arguably losing some ground to faster and cheaper competitors like Solana as well as to its own dysfunctions, like the recent spate of hacks of protocols on its network. But, it still dominates in the decentralized finance (DeFi) and real-world asset (RWA) tokenization spaces, the latter of which could constitute the future of crypto.

So if you believe in the present and future health of those segments, and you should, there's still a bright future ahead for Ethereum. Don't sell it, and don't sell your Bitcoin either.

Alex Carchidi has positions in Bitcoin, Ethereum, Solana, and iShares Bitcoin Trust. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Solana, and iShares Bitcoin Trust. The Motley Fool has a disclosure policy.