This is the year we see institution adoption of crypto, most notably Bitcoin.
The conversation around Bitcoin treasury companies is now getting worn out. We have a number of companies that basically exist to buy Bitcoin (Strategy). This is now spreading to other coins, as Ethereum, BNB, and Solana were picked up.
Public companies are also adding crypto to their balance sheets. This is often being done via the ETF that are offered out by the likes of Blackrock.
Combine all of this and we see how 2025 is the year of crypto adoption by institutions. They are gaining exposure in a number of ways.
There is a recent entrant to the game, one that is certain to capture the attention of the industry.
In the United States, Harvard has the largest endowment of any university. It is sitting over $50 billion.
That is a lot of money to invest, making it a decent sized hedge fund if it operated in such a fashion.
For this reason, when a decision is made regarding the financial situation, it is big news. Harvard might be setting what could become a larger trend. If other university money managers take their prompts, at least in part, from Harvard, this will open up some floodgates.
The investment strategy by the institution is one of Big Tech. The top 4 holdings all fall into this category. A recent move into crypto has put another asset class in that top 5 group.
According to a filing with the Securities and Exchange Commission (SEC), Harvard held 1.9 million shares of the iShares Bitcoin Trust ETF as of June 30, 2024. This positioning places Bitcoin in the top 5 investments of the institution, just behind Microsoft, Amazon, Booking Holdings, and Meta.
That is quite a list. This is some of the 'Who's Who" in the world of tech. The fact that Bitcoin is now the 5th largest holdings, via the ETF, says a lot.
It also sends a powerful message to all other institutional players.
This investment represents only a fraction of its endowment, but it sends a clear signal: BTC is now considered a strategic asset, not just a market experiment. For other funds, the message is simple: ignoring crypto could soon represent a greater risk than entering it.
There is little doubt, Bitcoin is going mainstream. Naturally, this is not as the original Bitcoin developers envisioned. Nor is it in alignment with what was proposed by early advocates. Bitcoin payments are not exploding.
That said, we can see the adoption of Bitcoin as an investment vehicle penetrating the global psyche. Institutions are the gold standard on this since they control so much money. Each institutional investment can only be matched by thousands of retail investors. The latter simply does not have the financial clout.
Harvard sitting on $50 billion is an example of this.
As a percentage the move was minimal. Nevertheless, the message is clear: Bitcoin is legitimate for major institutions to amass and hold. The ETF offers an easy vehicle for these entities to gain the exposure they seek.
I long stated that Bitcoin is a different animal. This is not so much because of the characteristics which many espouse as being the game changer. When it comes to finance, confidence is the key.
People are gaining confidence in Bitcoin as an asset. For this reason, unlike the rest of crypto which has to rely upon some form of utility for long-term success, Bitcoin operates based upon its name recognition. People hold it because they believe the value will be there.
Of course, we get a self-fulfilling prophecy going. When more people forecast higher Bitcoin prices, and that is followed up with action, demand increases. This is coupled by the HODL mindset, which is native among many of these institutions. The result is a removal of coins available for purchase on the market.
Price reacts accordingly over the long haul. Pullbacks are natural but the core equation is always in operation. Even during the bear, it is there.
Harvard is no STRATEGY in terms of the holdings. It is, however, the mouthpiece for universities. Now that a portion of its endowment is in Bitcoin, it opens the door for others to enter.
