Berkshire Hathaway's Temporary Glitch Sheds Light on Bitcoin's Remarkable Growth
Summary:
On June 3, a technical glitch on the New York Stock Exchange caused a temporary slump in Berkshire Hathaway's stock, making it appear to plummet nearly 100%. The event highlighted Berkshire Hathaway's underperformance against Bitcoin over the last decade. Data suggests incorporating even 1% Bitcoin into Berkshire Hathaway's portfolio could have boosted returns significantly. Despite wariness from its owner, Warren Buffet, Bitcoin has grown into one of the most valued assets worldwide, even exceeding Berkshire Hathaway's market capitalization.
Berkshire Hathaway's stock, BRK.A, underwent a sudden but temporary plummet on June 3 due to a technical error on the New York Stock Exchange. The fault resulted in Berkshire shares appearing to crash nearly 100% in value, leading the Exchange to pause transactions on several prominent stocks to rectify the problem. By the day's end, the NYSE assured it would annul all trade anomalies caused by this technical problem. However, this event shone a spotlight on a long-standing issue - Berkshire Hathaway's dramatic underperformance compared to Bitcoin (BTC) for the past decade.
Since 2015, the value of Berkshire Hathaway's stock has taken a drastic plunge of almost 100% against Bitcoin, going from approximately 1,000 BTC to a mere 9.15 BTC. This comes into sharp contrast with Warren Buffett, the Berkshire Hathaway owner, known for his negative stance towards Bitcoin, once infamously labeling it as "rat poison squared."
Surprisingly, incorporating just 1% Bitcoin into Berkshire Hathaway's current portfolio, featuring top stocks like Apple, Bank of America, and American Express, could have propelled returns from 214% to 240% over a modified five-year period, according to the Nakamoto Portfolio simulator data.
Boosting the portfolio allocation to Bitcoin by 5-10% over the same period could have netted phenomenal returns of 328-410% for the investor giant, Warren Buffett.
Bitcoin has proven its value, despite Buffett's persistent skepticism, becoming one of the most highly valued assets globally. Bitcoin ascended to the ninth position among global assets based on market capitalization, around $1.36 trillion, as of June 4. Impressively, Bitcoin surpasses Meta Platforms and Berkshire Hathaway, with market caps of $1.20 billion and $899.36 million, respectively.
The upcoming months and years could see a further boost in Bitcoin's valuation as it increasingly serves as a substitute for the traditional safe haven, gold, with a massive market cap of $15.8 trillion. To illustrate, like Berkshire Hathaway's stock, the price of gold has also seen a staggering slump of over 99% against Bitcoin since 2015.
Expert trader Peter Brandt predicts Bitcoin growth by 230%, making a triumphant leap to a new record of 100 ounces of gold per BTC. This would catapult Bitcoin above silver's market cap of $1.68 trillion. Though this piece doesn't provide any investment guidance or suggestions, investors are advised to do thorough research ahead of any investment or trade, given the associated risk factors.
Published At
6/4/2024 5:37:42 PM
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