Harvard University’s endowment trimmed its bitcoin position and added nearly 3.9 million shares of BlackRock’s ether ETF (worth $56.6 million) in the fourth quarter of 2025, sparking debate over whether the institution is backing Ethereum over Bitcoin or simply adjusting portfolio risk.
Volatility Triggered Rebalancing, Not Strategic Shift
Michael Markov, co-founder of Markov Processes International, who tracks university endowments, noted that crypto is the most volatile part of Harvard’s public markets portfolio. In Q4, both bitcoin and ether dropped roughly 25%, and volatility surged. When an asset’s risk contribution overshoots its capital weight, trimming restores balance — without implying a change in long-term conviction. “When volatility rises sharply, the risk contribution of that sleeve can expand disproportionately relative to its capital weight,” Markov said, adding that reducing exposure “can happen without implying a strategic shift.”
Harvard first bought bitcoin in Q3 2025 via BlackRock’s spot ETF, allocating roughly 20% of its U.S.-listed public equity holdings to crypto. The recent cutback mirrors standard Wall Street rebalancing: selling outperforming assets and buying underperforming ones to prepare for a market rotation. With traditional equities at lofty valuations, endowments are also exploring digital asset ETFs as alternative investments to lift returns in years when crypto outperforms.
Liquidity Pressure from Private Equity Commitments
Harvard has increased its allocation to private equity in recent years, tying up capital in illiquid investments while carrying billions in unfunded commitments. “The liquid sleeve is relatively small compared to capital call obligations,” Markov said. When private equity capital calls come due, Harvard tends to sell liquid public holdings — including crypto ETFs — to fund them. “Selling some public ETFs — including crypto ETFs — is mechanically the easiest way to manage that pressure.”
Yet Harvard didn't exit crypto entirely. It chose to add ether ETFs rather than bitcoin ETFs, a detail market watchers see as a tilt toward Ethereum’s ecosystem. Samir Kerbage, CIO at Hashdex, called the move “a clear sign of institutional demand for crypto assets beyond bitcoin.” He pointed to the GENIUS Act, signed into law in July, which makes it easier for large allocators to navigate crypto. As stablecoin and tokenized security rules take shape, investment committees may feel more comfortable backing networks that power these applications.
Ethereum sits at the center of that activity — it’s the dominant network for stablecoins, tokenized funds and onchain financial applications. Unlike bitcoin, it offers institutional staking, allowing holders to lock tokens to secure the network and earn yield. That makes ether less of a pure directional bet and more like exposure to the infrastructure behind digital financial services.