Top universities get burned by investments too? Harvard invested $500 million heavily right before Bitcoin plunged.

Harvard University's massive endowment fund made a bold bet on the eve of Bitcoin's price peak and subsequent decline, highlighting that even top institutional investors face severe timing risks as cryptocurrency becomes increasingly mainstream.

According to a December 2 report by The Wall Street Journal, based on Harvard's latest quarterly disclosure, the wealthiest university in the U.S. sharply increased its holdings in the iShares Bitcoin Trust ETF to nearly $500 million last quarter. However, since the start of this quarter, Bitcoin's price has fallen more than 20%, and Tuesday's rebound has not reversed the downward trend.

This cryptocurrency rout, which has affected Wall Street and retail investors, has also cast doubt on the outlook for Harvard's investment. Although any crypto losses are negligible compared to its colossal $57 billion endowment fund, this ill-timed bet reveals the widespread phenomenon of institutional investors continuing to increase their holdings after sharp cryptocurrency rallies.

Had Harvard sold before prices fell in early October, it could have escaped unscathed or even made modest gains. But if the university is still holding some or all of the shares it bought last quarter, paper losses may now be unavoidable.

Less-than-ideal timing

Documents show that Harvard University bought 4.9 million shares of the iShares Bitcoin Trust ETF last quarter (ending September 30). Since Harvard’s average purchase price is unknown, potential losses cannot be calculated precisely.

The best-case scenario is that these shares were bought at the lowest point of Bitcoin’s price in early July that quarter, meaning Harvard paid about $294 million, while their current value is about $255 million—a roughly 14% paper loss.

In contrast, Harvard’s 1.9 million shares bought in the second quarter before Bitcoin's surge may be faring much better.

The nearly $500 million Bitcoin holding makes up less than 1% of the university’s $57 billion endowment.

Institutions rushing into crypto

Harvard’s move is a microcosm of Bitcoin’s growing mainstream status among institutional investors.

Following this year’s impressive rally, rational capital continues to be optimistic and buy in. Before the recent pullback, Bitcoin's price soared 34% into 2025, reaching a record high above $126,000.

Other universities also seem affected by the current crypto price drop, but to a much lesser extent. Universities reporting crypto holdings for the third quarter include Brown University, with $14 million in BlackRock's Bitcoin ETF, and Emory University, with $52 million in Grayscale's Bitcoin Mini Trust ETF.

A tug-of-war between performance pressure and long-termism

Harvard’s investment decisions may also be influenced by considerations about performance pressure.

Over the past decade, Harvard’s annualized investment return was 8.2%, ranking near the bottom among Ivy League and other top schools. Although annualized returns rose to 9.6% during current CEO N. P. “Narv” Narvekar’s eight-year tenure, and the fiscal year ended June 30 posted a considerable 11.9% gain, it still trails MIT’s 14.8% and Stanford’s 14.3%.

For long-term investors like endowment and pension funds, paper losses may not be a problem if prices eventually rebound. Some institutional investors have endured severe crypto volatility for years. For example, public pension funds were hit hard during the crypto crash in 2022, but since then Bitcoin prices have risen more than fivefold.

However, some investors believe crypto is not suitable for long-term holding. Infrastructure Capital Advisors CEO Jay Hatfield said, "When you’re gambling, what you need is to sell it, not to hold it."

Risk Warning and DisclaimerThe market is risky, and investments should be made with caution. This article does not constitute personal investment advice and does not take into account any individual user's specific investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are appropriate to their particular situation. If you invest based on this information, you do so at your own risk.