Key takeaways:
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Buffett’s rising money urge for food has traditionally preceded inventory market crashes.
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A possible Nasdaq downturn will probably pull down Bitcoin, too.
Warren Buffett’s Berkshire Hathaway raised its money holdings to roughly $350 billion by mid-2025, combining Treasury payments and money. That’s an all-time excessive for the corporate and the most important amongst US public corporations.
However what does this money pile imply for Bitcoin (BTC), whose worth has almost doubled over the previous 12 months to a file $124,500 in August?
Buffett will get into money earlier than main inventory crashes
Berkshire’s money holdings in 2024–2025—reaching $347.7 billion (50.7% of shareholders’ fairness, 28–30% of complete property) in Q1 2025—sign Buffett’s preparation for a possible market downturn.
Buffett has repeatedly raised liquidity during times of market extra. Put otherwise, he has been fearful when everybody was grasping.
In 1998, he led Berkshire to chop inventory publicity and carry money holdings to $13.1 billion, about 23% of complete property.
By mid-2000, money peaked close to $15 billion, or 25% of property, earlier than Buffett diminished the place to purchase bargains after the Dot-Com bubble burst.
Then Buffett once more constructed up his money pile. By Q1 2005, Berkshire’s money and equivalents reached $46.1 billion, equal to 51% of shareholder fairness, the very best degree in that period and closest to present ranges.
Money remained elevated into 2007 at $44.3 billion, about 29% of complete property, simply forward of the 2008 monetary disaster.
Overheated Nasdaq raises Bitcoin draw back dangers
Buffett’s warning appears extra related given at present’s fairness valuations.
The Nasdaq’s market cap has surged to 176% of the US M2 cash provide, effectively above the 131% Dot-Com peak, in response to knowledge from Maverick Fairness Analysis sourced by The Kobeissi Letter.
In opposition to the US GDP, the Nasdaq now stands at 129%, almost double its 2000 excessive of 70%. These file readings spotlight how far inventory costs have outpaced each cash provide and the economic system.
Bitcoin has risen alongside the Nasdaq, with a 52-week correlation of 0.73. Which means more often than not, the highest crypto strikes in the identical course as tech shares.
Buffett’s file money place highlights dangers in equities and crypto as a result of Bitcoin strikes equally to the Nasdaq.
Increasing M2 provide: Bitcoin high just isn’t in?
Nonetheless, how Buffett’s file money pile and Nasdaq’s dangers play out will finally depend upon the speed of cash provide development.
The US M2, which tracks liquid money and deposits, has began to increase once more after flatlining by means of a lot of 2025. By July 2025, it rose 4.8% year-over-year to $22.1 trillion, the quickest tempo since early 2022, in response to FRED knowledge.
Earlier within the 12 months, development was nearer to 2.4%, exhibiting momentum is choosing up.
Globally, greater than 20 central banks have minimize charges in 2025, and forecasts counsel the Federal Reserve might comply with with easing that might push annual M2 development again towards 10–12%, in response to economist Daniel Lacalle.
Traditionally, Bitcoin stands to learn if US policymakers are pressured to increase the cash provide to defend fairness markets.
Associated: Bitcoin worth goal ‘sits round $170K’ as world M2 provide reaches file excessive
That is what occurred post-2020, when BTC rose from $3,800 to $69,000 as world M2 ballooned.
“World M2 (cash provide) has traditionally led Bitcoin by ~12 weeks,” writes analyst CryptoRodo, including:
“Each time liquidity re-accelerates, BTC ultimately follows.”
This text doesn’t include funding recommendation or suggestions. Each funding and buying and selling transfer entails threat, and readers ought to conduct their very own analysis when making a call.
