Buffett Dumps $13.3 Billion in Stocks, Bad Sign for Bitcoin?

There have been signs for some time that the economy is slowly moving into recession. For stocks, cryptocurrencies and other high-risk assets, this is often not positive. Warren Buffet’s company Berkshire Hathaway sold a large amount of shares last quarter.

Berkshire is in cash: crisis on the way?

The huge investment fund has its quarterly figures published. This shows that it has sold shares worth $13.3 billion. Much of this has gone into cash and US government bonds.

It has also used part of the uninvested money to buy back its own shares, an accounting trick that often inspires investor confidence because the price of the share usually rises. Furthermore, it has not only sold shares. It has also invested $2.9 billion in other publicly traded companies. Still, the net amount of shares sold is $13.3 billion.

Since the end of 2021, the investment fund has not had as much cash on the balance sheet as it does now. Last quarter, the net total increased $2.6 billion to $130.6 billion.

Bitcoin early stock indicator

The market sees the stock market performance and the opinion of Berkshire’s top people as an important indicator of the market. After all, the fund has built up a legendary status over the years. Warren Buffett is even nicknamed the ‘Oracle of Omaha’.

In addition, Berkshire Hathaway has many stocks that are an indicator of how the US economy is doing, such as retail companies, banks and utilities.

Bloomberg analyst Mike McGlone writes on Twitter that bitcoin (BTC) has a very high correlation with stocks. It is often even a leading indicator for other risky assets. So investors first sell bitcoin (and crypto in general) before deciding to sell stocks. The former is riskier. “If the worst is not over for stocks,[the bitcoin price]could show that,” McGlone said.

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