Harvard University expanded its Bitcoin exchange-traded fund holdings by 257% in the third quarter of 2024, making the iShares Bitcoin Trust its largest disclosed position as of September 30, according to regulatory filings.
The university simultaneously increased its gold ETF holdings by 99% during the same period, allocating to Bitcoin at a 2-to-1 ratio relative to gold, according to Matt Hougan, chief investment officer at Bitwise.
The Bitcoin (BTC) position represents approximately 0.75% of Harvard’s endowment, ranking the institution among the top 20 largest holders of the BlackRock-managed fund, according to available data.
The university’s Bitcoin accumulation occurred before a market correction that reduced the value of cryptocurrency holdings. Bitcoin has declined since the third quarter ended on September 30.
Endowment Performance and Investment Rationale
Harvard’s endowment posted an 8.2% annualized return over the past decade, ranking ninth out of 10 elite schools in a recent comparison. For the year ending June 30, the university reported an 11.9% gain, trailing some peer institutions.
Stanford finance professor Joshua Rauh stated that investors often view both Bitcoin and gold as hedges against a collapse of the international monetary system and against a loss of the U.S. dollar. However, he noted that the extent to which either asset protects investors from these forces remains uncertain and scenario-dependent.
Harvard’s Bitcoin allocation contrasts with earlier assessments from its own economics faculty. Kenneth Rogoff, a Harvard professor and former International Monetary Fund chief economist, previously argued that Bitcoin would be worth a fraction of its value over a decade if regulators removed money-laundering and tax-evasion uses. Rogoff recently acknowledged his assessment was incorrect, writing that he had been too optimistic about regulatory developments.
Rogoff stated he did not anticipate a situation where regulators would be able to hold large amounts of cryptocurrencies without consequence given potential conflicts of interest.
Criticism and Market Context
MarketWatch columnist Brett Arends criticized the investment as an “environmental catastrophe,” noting that Bitcoin’s global computing network uses more energy annually than some medium-sized countries. Stanford professor Darrell Duffie expressed surprise at the investment, stating that Bitcoin does not pay dividends and has limited uses as a payment instrument.
Bitcoin has experienced significant outflows from ETF products over recent weeks, according to market data. The cryptocurrency is trading below recent highs amid weakening market sentiment.
Arthur Azizov, founder and investor at B2 Ventures, described the current market situation as one that has lost stability. He noted a disconnect with traditional markets, pointing out that broad equity indexes are up substantially in 2024 while Bitcoin is down modestly.
Azizov stated that a large share of Bitcoin is currently held at a loss, resulting in selling pressure from holders seeking to exit positions. He added that a large amount of Bitcoin options is expiring around key price levels, making traders cautious. Only a strong move above recent thresholds could restore confidence and open the way toward higher levels, according to Azizov.