Key Points
- Technical glitch on NYSE caused Berkshire Hathaway's stock to appear to have fallen by almost 100%.
- Berkshire Hathaway's stock has significantly underperformed compared to Bitcoin over the past decade.
On June 3, a technical malfunction on the New York Stock Exchange (NYSE) led to a sharp, short-lived drop in Berkshire Hathaway's stock, BRK.A.
The glitch made it seem like Berkshire shares had plummeted nearly 100%, leading the NYSE to stop trading in several prominent stocks to rectify the problem.
Erroneous Trades and Underperformance
Near the end of trading, NYSE stated it would swiftly cancel the incorrect trades resulting from the earlier glitch.
Despite this, the incident has highlighted the significant underperformance of Berkshire Hathaway's stock against Bitcoin (BTC) in the past ten years—without any glitches.
Berkshire Hathaway's stock has seen a nearly 100% decrease in value compared to Bitcoin since 2015—from approximately 1,000 BTC to 9.15 BTC.
Interestingly, Bitcoin's performance against BRK.A and its major stock holdings is in stark contrast to Berkshire Hathaway owner Warren Buffett's critical view of Bitcoin, which he once famously referred to as "rat poison squared."
Bitcoin's Growing Value
Incorporating even just 1% Bitcoin into Berkshire Hathaway's existing portfolio, which includes top stock holdings like Apple, Bank of America, and American Express, could have increased returns from 214% to 240% over a five-year adjusted period.
Meanwhile, allocating 5-10% of the portfolio to Bitcoin could have yielded impressive returns of 328-410% for Warren Buffett during the same time frame.
Buffett's resistance to Bitcoin hasn't prevented the cryptocurrency from becoming one of the most valued assets worldwide.
As of June 4, Bitcoin's net market capitalization was around $1.36 trillion, making it the world’s ninth-largest asset by valuation. Notably, Bitcoin is ahead of Meta Platforms and Berkshire Hathaway, whose market caps are $1.20 billion and $899.36 million.
Bitcoin's valuation is likely to rise in the coming months and years as it gains traction as an alternative safe haven to gold, which currently has a market cap of $15.8 trillion.
For example, the price of gold, like Berkshire Hathaway stock, has fallen over 99% versus Bitcoin since 2015.
According to experienced trader Peter Brandt, Bitcoin will likely grow 230% to reach a new record high of 100 ounces of gold per BTC. In doing so, the cryptocurrency may surpass silver's market cap of $1.68 trillion next.
