Berkshire Hathaway Achieves $1 Trillion Valuation — Approaching Bitcoin Market Size

Warren Buffett’s Berkshire Hathaway has reached a valuation that is nearly equivalent to the total market cap of Bitcoin.

Buffett’s Performance Without Bitcoin in 2024

On August 28, Berkshire Hathaway’s stock (BRK.A) increased by 0.75%, bringing its total valuation to over $1 trillion. So far in 2024, the stock has surged over 29%, surpassing the S&P 500 index’s 17% gains, although it slightly trails Bitcoin’s increase of 31% during the same timeframe.

As of August 29, Bitcoin’s market capitalization stands at $1.18 trillion.

The close performance between Berkshire Hathaway and Bitcoin in 2024 raises interesting points. Despite Buffett’s public skepticism toward cryptocurrencies and his infamous comparison of Bitcoin to “rat poison,” his investment strategy is effectively mirroring Bitcoin’s results this year.

This means investors holding Bitcoin are seeing returns that are comparable to those of the renowned investor from Omaha.

Berkshire’s substantial profits can be attributed to its diverse array of businesses, including insurance, energy, manufacturing, retail, and services, which collectively earned $22.8 billion in the first half of 2024 — a 26% increase from the previous year.

Key contributors to Berkshire’s profitability include BNSF Railway, Geico insurance, Berkshire Hathaway Energy, Dairy Queen, Brooks Running, Ginsu knives, and World Book.

The company also maintains a significant investment in Apple, though it sold half of its stake earlier this year. Currently, Berkshire boasts $276.9 billion in cash and cash equivalents, primarily in US Treasury bills, as of June 30.

Buffett has shown no intention of reallocating his cash reserves into Bitcoin, despite the asset’s increasing prominence in the financial landscape, particularly following the introduction of Bitcoin spot ETFs in the United States in January.

Bitcoin’s Strong Performance Relative to Berkshire Hathaway

Berkshire Hathaway’s stock has consistently lagged behind Bitcoin over the past decade, diminishing by 99.98% since its peak in 2011 compared to BTC/USD.

Data from the Nakamoto Portfolio simulator indicates that if Berkshire Hathaway had allocated just 1% of its portfolio to Bitcoin, its five-year returns could have increased from approximately 185% to 207%. Major holdings include Apple, Bank of America, and American Express.

Furthermore, allocating between 5% and 10% of the portfolio to Bitcoin would have resulted in substantial returns of 130.97% to 279.64% for Buffett in the same timeframe.

This content does not serve as investment advice or recommendations. All investments and trading activities involve risk, and it is crucial for readers to conduct thorough research before making any financial decisions.