Warren Buffett has Enough Spare Cash to Buy Two-Thirds of All Existing Bitcoin

Journalist:
Ben Brown
September 19, 2019

Warren Buffett isn’t much of a bitcoin fan. He’s called it rat poison squared, a gambling device, delusional, and a seashell with no inherent value.

But, if he wanted to, he could become the biggest bitcoin whale of them all. Buffett could buy two-thirds of the existing BTC supply… in cash.

Warren Buffett’s investment firm Berkshire Hathaway reported a record $122 billion cash pile in a recent filing. That’s about two-thirds of bitcoin’s current market capitalization of $177.6 billion.

Sidenote: obviously, this isn’t actually possible. Only a small portion of bitcoin’s existing supply trades openly so Buffett would have a hard time buying up large quantities. Not to mention, much of existing supply is tied up in long-term holding or simply lost forever.

Bitcoin: still a relatively small asset

The point of the comparison is to put bitcoin’s relatively small size into perspective. It’s still early days and BTC has a comparatively small market cap on the global arena.

In terms of other comparisons, bitcoin is still just 2% of the market capitalization of gold. Adamant Capital partner Tour Demeester believes this could grow to 20% in the next decade.

“Bitcoin’s market cap is now ~2% of gold’s market cap. I think it’s fair to project growth to 20% in next 5-10 years. If you believe in hard money, in tech, and in the future purchasing power of millennials, imo bitcoin is the perfect complement to an existing gold position.”

Warren Buffett probably won’t buy bitcoin…

Despite his enormous cash position, Buffett probably isn’t “stacking sats.” As CCN previously reported, the billionaire has a number of issues with the cryptocurrency:

“Bitcoin has no unique value at all. It doesn’t produce anything. You can stare at it all day and no little bitcoins come out. It’s a delusion basically.”

So what is Warren Buffett doing with his mountain of cash? Berkshire Hathaway hasn’t held a cash position this large (in percentage terms) since prior to the 2008 recession. Some commentators think Buffett is positioning a defensive portfolio ahead of a looming crash.

But in Buffett’s words, he’s looking for an “elephant sized acquisition.” The only problem, he says, is that everything is overvalued right now.

Buffett could join the whales

Even if Warren Buffett committed 1% of his cash allocation to BTC, he’d buy up $1.2 billion worth of the cryptocurrency. It would immediately elevate him to the ranks of bitcoin whale.

Only the “Bitcoin billionaires” – the Winklevoss Twins – and a handful of mysterious whales could claim to own as much.

Click here for a real-time bitcoin price chart.

This article was edited by Samburaj Das.

Last modified (UTC): September 19, 2019 14:25

Ben Brown

Ben is a journalist with a decade of experience covering financial markets. Based in London, UK, his writing has appeared in The Huffington Post and he was Chief Editor at Block Explorer, the world's longest-running source of Blockchain data. Reach him at benjamin-brown.uk or on Twitter at _Ben_Brown. Email ben @ benjamin-brown.uk.