Much has been made of Bitcoin’s recent reaction to the U.S. stock market. Over the first part of this year, major indices slumped, while Bitcoin’s value soared up around 21%.
It wasn’t too long ago that Bitcoin value was under $5000 – now it’s approaching the $9000 mark, allowing traders with precise timing to nearly double their money within a year with some handy profit taking. Many, though, are holding out for more.
But the Oracle from Omaha is not bullish on Bitcoin, and is instead keeping some $137 billion in cash. By any estimate, that much money is nothing to sneeze at, so you could say Buffett is putting his money where his mouth is.
“Warren Buffett and Berkshire Hathaway remain reluctant in spending its $137 billion cash pile,” reports Joseph Young at Cointelegraph this morning. “Their cautious stance towards the abrupt recovery of the U.S. stock market may spoil the recent Bitcoin (BTC) rally.”
While the somewhat established consensus is that Bitcoin is going to gain from the Fed furiously injecting billions of dollars into the American fiat currency system, Buffett seems to think that keeping money on the sidelines is a better option. Some interesting analysis undergirds the contention that BTC may at some point deflate in a correction, as Young writes, curiously:
“In previous rallies, spoof orders coming from the futures market created speculative short-term bubbles that burst as soon as a large whale triggered a cascading sell-off.”
That would seem to support Buffett’s recalcitrance, but hodlers see it differently. Traders looking at the cratering of equities (and oil), institutional buy-in, and the upcoming halving event would probably not put a lot of stock in the idea that BTC is over-valued. However, reporting like Young’s today from impartial analysts often signals that by the end of the week, Bitcoin could really go either way.