Is Warren Buffett’s growing cash pile a bad sign for stocks and Bitcoin?

3 hours ago

Key takeaways:

Buffett’s increasing currency appetite has historically preceded banal marketplace crashes.
A imaginable Nasdaq downturn volition apt propulsion down Bitcoin, too.

Warren Buffett’s Berkshire Hathaway raised its currency holdings to astir $350 cardinal by mid-2025, combining Treasury bills and cash. That is an all-time precocious for the institution and the largest among US nationalist firms.

But what does this currency heap mean for Bitcoin (BTC), whose terms has astir doubled implicit the past twelvemonth to a grounds $124,500 successful August?

Buffett gets into currency earlier large banal crashes

Berkshire’s currency holdings successful 2024–2025—reaching $347.7 cardinal (50.7% of shareholders’ equity, 28–30% of full assets) successful Q1 2025—signal Buffett’s mentation for a imaginable marketplace downturn.

Buffett has repeatedly raised liquidity during periods of marketplace excess. Put differently, helium has been fearful erstwhile everyone was greedy.

In 1998, helium led Berkshire to chopped banal vulnerability and assistance currency holdings to $13.1 billion, astir 23% of full assets.

By mid-2000, currency peaked adjacent $15 billion, oregon 25% of assets, earlier Buffett reduced the presumption to bargain bargains aft the Dot-Com bubble burst.

Then Buffett again built up his currency pile. By Q1 2005, Berkshire’s currency and equivalents reached $46.1 billion, adjacent to 51% of shareholder equity, the highest level successful that epoch and closest to existent levels.

Cash remained elevated into 2007 astatine $44.3 billion, astir 29% of full assets, conscionable up of the 2008 fiscal crisis.

Overheated Nasdaq raises Bitcoin downside risks

Buffett’s caution looks much applicable fixed today’s equity valuations.

The Nasdaq’s marketplace headdress has surged to 176% of the US M2 wealth supply, good supra the 131% Dot-Com peak, according to information from Maverick Equity Research sourced by The Kobeissi Letter.

Against the US GDP, the Nasdaq present stands astatine 129%, astir treble its 2000 precocious of 70%. These grounds readings item however acold banal prices person outpaced some wealth proviso and the economy.

Bitcoin has risen alongside the Nasdaq, with a 52-week correlation of 0.73. That means astir of the time, the apical crypto moves successful the aforesaid absorption arsenic tech stocks.

Buffett’s grounds currency presumption highlights risks successful equities and crypto due to the fact that Bitcoin moves likewise to the Nasdaq.

Expanding M2 supply: Bitcoin apical is not in?

However, however Buffett’s grounds currency heap and Nasdaq’s risks play retired volition yet beryllium connected the complaint of wealth proviso growth.

The US M2, which tracks liquid currency and deposits, has started to grow again aft flatlining done overmuch of 2025. By July 2025, it roseate 4.8% year-over-year to $22.1 trillion, the fastest gait since aboriginal 2022, according to FRED data.

Earlier successful the year, maturation was person to 2.4%, showing momentum is picking up.

Globally, much than 20 cardinal banks person chopped rates successful 2025, and forecasts suggest the Federal Reserve whitethorn travel with easing that could propulsion yearly M2 maturation backmost toward 10–12%, according to economist Daniel Lacalle.

Historically, Bitcoin stands to payment if US policymakers are forced to grow the wealth proviso to support equity markets.

This is what happened post-2020, erstwhile BTC roseate from $3,800 to $69,000 arsenic planetary M2 ballooned.

“Global M2 (money supply) has historically led Bitcoin by ~12 weeks,” writes expert CryptoRodo, adding:

“Every clip liquidity re-accelerates, BTC yet follows.”

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.

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