Buffett’s $350B Cash Pile Flags Stock and Bitcoin Downside
Berkshire Hathaway’s cash pile has surged to about $350 billion by mid-2025, the largest among US firms. Buffett has historically increased liquidity at market peaks, such as in 1998, 2000 and 2007, ahead of crashes. Today, the Nasdaq market cap stands at 176% of US M2 money supply and 129% of GDP, far above past highs. Bitcoin and the Nasdaq share a 0.73 correlation, risking a crypto downturn if stocks fall. Meanwhile, US M2 is rebounding—up 4.8% year-over-year in July—with potential Fed easing pushing growth toward 10-12%. A wider money supply could buoy Bitcoin. Traders should weigh the short-term bearish risk driven by this cash pile and market imbalance against the longer-term bullish outlook from renewed liquidity that may support Bitcoin.
Bearish
Buffett’s surge in cash reserves to $350 billion mirrors his historic pattern of raising liquidity at market peaks, seen before the 2000 dot-com crash and 2008 financial crisis. Today’s elevated Nasdaq valuations relative to M2 and GDP, combined with a 0.73 correlation between Bitcoin and tech stocks, suggest that a stock sell-off could trigger significant downward pressure on Bitcoin. In the short term, this imbalance and looming market correction create bearish risks for traders. However, renewed M2 expansion and potential Fed easing could inject liquidity, offering a longer-term bullish catalyst for Bitcoin. Yet, given the historical precedence of cash builds preceding declines, the immediate outlook favors a bearish stance on both equities and crypto.