Warren Buffett pivots to US Treasurys — A bad omen for Bitcoin price? (1)

Warren Buffett has put most of Berkshire Hathaway’s cash in short-term United States Treasury bills, now that they offer as much as 3.27% in yields. But while the news does not concern Bitcoin (BTC) directly, it may still be a clue to the downside potential for its price in the short term.

Berkshire’s net cash position was $105 billion as of June 30, out of which $75 billion, or 60%, was held in T-bills, up from $58.53 billion at the beginning of 2022 out of its $144 billion total cash reserves.

The move is likely a response to bond yields jumping massively since August 2021 in the wake of the Federal Reserve’s hawkish policies aimed at curbing inflation, which was running at 8.4% in July.

For instance, the three-month U.S. T-bill returned a 2.8% yield on Aug. 22 compared with a near-zero yield a year ago. Similarly, the yield on the U.S. one-year T-bill climbed from zero to 3.35% in the same period.

U.S. 3-month and 1-year bond yield versus BTC/USD daily timeframe

Meanwhile, non-yielding assets like gold and Bitcoin have dropped roughly by 2.5% and 57%, respectively, since August 2021. The U.S. stock market benchmark S&P 500 $S&P 500 Index(.SPX.US)$ likewise saw a decline, losing nearly 7.5% in the same period.

Such a difference in performance presents T-bills as an ultra-safe alternative for investors compared with gold, Bitcoin and stocks. Buffett’s T-bill strategy suggests the same, namely a bet on more downside for risk-on assets in the near term — particularly as the Fed gears up for more rate hikes.

$Berkshire Hathaway 13F(BK2999.US)$ $Berkshire Hathaway-A(BRK.A.US)$ $Berkshire Hathaway-B(BRK.B.US)$ $Bitcoin(BTC.CC)$ $SPDR Bloomberg Barclays 1-3 Month T-Bill ETF(BIL.US)$ $iShares 3-7 Year Treasury Bond ETF(IEI.US)$ $iShares 1-3 Year Treasury Bond ETF(SHY.US)$ $Treasury Yield 30 Years(.TYX.US)$ $Citigroup(C.US)$ $Bank of America(BAC.US)$

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areecep

Some famous words of Buffett. I hope it's useful to you. : )

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