Berkshire Hathaway Valuation Nears Bitcoin Market Cap

According to Cointelegraph, Warren Buffett’s Berkshire Hathaway has reached a valuation close to the entire Bitcoin (BTC) market after surpassing $1 trillion. On August 28, Berkshire Hathaway’s stock, BRK.A, rose by 0.75%, pushing its valuation above the trillion-dollar mark. The stock has rallied over 29% in 2024, outperforming the S&P 500 index’s 17% rise but trailing Bitcoin’s 31% gains in the same period. As of August 29, Bitcoin’s market cap stands at $1.18 trillion. Despite Warren Buffett’s well-known aversion to cryptocurrencies, Berkshire Hathaway’s performance in 2024 has nearly matched Bitcoin’s. The company has achieved significant profits through its diverse portfolio, which includes businesses in insurance, energy, manufacturing, retail, and services. These segments delivered $22.8 billion in profit during the first half of the year, marking a 26% increase compared to last year. Notable portfolio winners include BNSF Railway, Geico car insurance, Berkshire Hathaway Energy, Dairy Queen, Brooks running shoes, Ginsu knives, and the World Book encyclopedia. Berkshire Hathaway also holds a major stake in Apple, although it sold half of its holdings earlier this year. As of June 30, the firm holds $276.9 billion in cash and cash equivalents, primarily in US Treasury bills. Despite Bitcoin’s growing relevance as a financial asset, especially following the launch of Bitcoin spot exchange-traded funds (ETF) in the US in January, Buffett has no plans to redirect his cash holdings to Bitcoin. Historically, Berkshire Hathaway stock has underperformed Bitcoin, dropping 99.98% since its 2011 peak versus BTC/USD. According to the Nakamoto Portfolio simulator, incorporating even just 1% Bitcoin into Berkshire Hathaway’s existing portfolio could have boosted returns from around 185% to 207% on a five-year adjusted timeframe. Allocating 5%–10% of the portfolio to Bitcoin could have achieved returns of 130.97-279.64% for Buffett in the same period.