- Back in May, Warren Buffett announced his plans to step down after serving as CEO of Berkshire Hathaway.
- With Greg Abel expected to take over, the rumors of the company getting more involved with Bitcoin have increased.
Berkshire Hathaway is undoubtedly undergoing one major transition, Warren Buffett stepping down, while another potential shift may still be up for debate. Buffett began investing in the struggling textile firm based in New Bedford, Massachusetts, back in 1962. By 1970, he had become the company’s chairman and largest shareholder.
At the annual shareholders meeting in May, Buffett officially announced his plans to step aside, naming Greg Abel, who has served as vice chair of non-insurance operations since 2018, as his successor.
Under Buffett’s leadership, Berkshire Hathaway stock skyrocketed by a staggering 5,502,284% between 1965 and the end of 2024. For comparison, the S&P 500 gained 39,054% in that same timeframe.
Since Warren Buffett announced he’s stepping down, Berkshire Hathaway’s Class A shares have dropped 14%, a sharp contrast to the S&P 500, which has climbed 11% over the same period. In fact, this marks the company’s biggest underperformance against the broader market in any three-month stretch since 1990.
The dip suggests investors may be feeling uncertain about what’s next for Berkshire under new leadership. On top of that, Donald Trump’s imposed tariffs on trading partners have added pressure, sparking a $1.1 trillion sell-off across U.S. markets last week. Still, there may be a silver lining ahead; the Fed is widely expected to cut interest rates in September, a move that could help restore.
Crypto-Adjacent Investments?
Warren Buffett has long been one of the most prominent and vocal critics of the cryptocurrency market, particularly Bitcoin (BTC). He has always seen cryptocurrencies as speculative tools and not real investments. With this, he has made it clear that he has never bought Bitcoin and never plans to.
Berkshire Hathaway’s investment strategy reflects this stance: the company does not hold Bitcoin for now.
Despite this skepticism, Berkshire has invested in companies that are crypto-adjacent. Earlier, Crypto News Flash reported on the company’s investment with Nu Holdings. Nu Holdings disclosed that Warren Buffett’s Berkshire Hathaway increased its stake in the company by 3x to 0.4% as per the third quarter of fiscal 2024.
Initially, back in 2021, Berkshire Hathaway invested a total of $500 million in Brazil’s digital bank Nu Holdings.
Greg Abel has not publicly expressed strong opinions about cryptocurrency, so the door to more modern or diversified asset strategies, like crypto, could theoretically open under the new leadership.
Currently, Bitcoin’s price is $116,000, after a slight 4% drop from its all-time high of $123,000 that we saw in July this year. The trading volume also rose above $61.17 billion, reflecting a 7% increase within 24 hours. This milestone is partly attributed to institutional adoption.
Companies like Strategy, formerly MicroStrategy, and Metaplanet are spearheading the adoption of Bitcoin despite the talk of its volatility and liquidity. More recently, CNF reported that a Mexican real estate giant, Grupo Murano, plans to invest $1 billion into Bitcoin.