Berkshire Hathaway Could Have Achieved Massive Gains with Bitcoin Investment
NAIROBI (CoinChapter.com) – Berkshire Hathaway’s stock (BRK.A) experienced a temporary but significant drop of almost 100% on June 3 due to a technical glitch on the New York Stock Exchange (NYSE). This incident, albeit short-lived, shed light on a missed opportunity for renowned investor Warren Buffett, who is famously critical of Bitcoin, referring to it as “Rat poison squared”.
The temporary drop in Berkshire Hathaway’s stock sparked jokes and discussions about the company’s performance. Tom Honzik posted,
Yashu Gola, a crypto analyst, further added to the conversation by stating that Berkshire Hathaway could have benefited from Bitcoin holdings. Gola’s analysis suggests that not only has Bitcoin outperformed Berkshire Hathaway, but it could have potentially boosted the company’s returns.
Bitcoin’s Potential Impact on Berkshire Hathaway’s Portfolio
Since 2015, Berkshire Hathaway’s stock has significantly underperformed compared to Bitcoin. While BRK.A saw a modest increase of approximately 114%, Bitcoin experienced a staggering surge of around 600% during the same period. This stark contrast has not gone unnoticed by the crypto community, especially considering Buffett’s previous dismissal of Bitcoin as “rat poison squared”.
Source: Nakamoto Portfolio
According to the Nakamoto Portfolio simulator, adding just 1% Bitcoin to Berkshire Hathaway’s existing portfolio could have increased five-year returns from 214% to 240%. This portfolio includes top stock holdings like Apple, Bank of America, and American Express.
The chart reveals that Apple Inc. (AAPL) is the largest holding at 49.21%, with a return of 474% and a sharp ratio of 0.86. In contrast, Bitcoin (BTC) shows an astounding return of 5,168% and a sharp ratio of 0.99, despite its higher volatility.
Interestingly, allocating 5%-10% to Bitcoin could have resulted in impressive returns of 328%-410% for Buffett during the same period. This data challenges his skepticism towards cryptocurrency and demonstrates its potential to enhance traditional investment portfolios.
In conclusion, while the NYSE glitch that caused Berkshire Hathaway to plummet 99% was a technical error, its 99% drop against Bitcoin since 2015 is a reality. This incident not only highlights market glitches, but also sparks a conversation about the evolving role of cryptocurrencies in traditional investment strategies.
