Warren Buffett and Berkshire Hathaway continue to be reluctant to spend their $ 137 billion in cash. His cautious stance in the face of the abrupt recovery in the US stock market, which may affect the recent surge in Bitcoin (BTC).
The Cryptocurrency best ranked for its market cap his short-term correlation with the US stock market long broke. However A possible short-term stock correction increases the likelihood of all speculative and risky assets being withdrawn.
The correlation of the Bitcoin S P 500. Source: Skew
Technically speaking, Bitcoin has more reasons to drop than to rise from $ 9,000
The Bitcoin price rose to $ 9,500 in a short space of time. It took less than two months for BTC to rise almost three times from $ 3,600..
Much of the positive sentiment surrounding the April bitcoin boom was attributed to the dominance of organic spot volume.. He suggested that private investors accumulate between USD 3,600 and USD 7,000 BTC.
With previous increases, wrong futures market orders created short-term speculative bubbles that burst as soon as a large whale triggered a cascade sale.
Although the high spot volume of exchanges like Coinbase can be viewed as an optimistic number, it cannot alone justify the sustainability of such a large increase within two months. Buffett is also struggling to find value on the stock market to conduct important acquisition deals.
Lecture at the Berkshire Hathaway General Meeting, Buffett said that $ 137 billion is not a big pile of money if bad things pile up in the market.. Berkshire is heavily involved in large conglomerates such as Coca Cola and Kraft Heinz. If the market goes in the opposite direction that analysts expect, the cash heap can be used to help Berkshire portfolio companies.
Bitcoin is at a point where it is facing strong resistance in the range of $ 9,500 to $ 9,900and the US stock market It is still agitated by the economic consequences of the coronavirus pandemic.
Given the cyclical nature of Bitcoin Technical analysts expect a correction for Bitcoin after the much anticipated halving on May 12.
Not everything is bearish for BTC, especially in the long term
As the world Holger market analyst Zschaepitz said: The previous two halves of Bitcoin resulted in a 10,000% gain and 2,500% for BTC.
The Bitcoin price development after earlier halving. Source: Holger Zschapitz
Bitcoin is a deflationary currency as the supply of BTC 21 million is fixed and cannot be changed. thats why Any event that significantly affects the supply of BTC has a profound impact on the price of the cryptocurrency.
Halving will lower the market launch rate of the new BTC when Bitcoin hits its $ 21 million offer limit. As the number approaches, theoretically an increase in the price of Bitcoin is expected.
The mood regarding high-risk stocks and assets remains cautious due to the uncertainty voiced by big investors like Buffett. But, In the long term, the data suggest that Bitcoin is likely to remain.
Long-term investors like Max Keizer are not impressed by Buffet’s recent investment decisions and Bitcoin vision. However, he notes that BTC has outperformed most assets, including gold, in the past two months..