In an unexpected twist, Bitcoin, the leading cryptocurrency, has achieved a significant milestone by surpassing the market capitalization of Warren Buffett's iconic Berkshire Hathaway investment conglomerate. Anthony Pompliano, a renowned venture capital investor and partner at Morgan Creek Digital, known as "Pomp" in the crypto world, took to X to highlight this historic moment. While Warren Buffett has long been a vocal critic of Bitcoin, recent developments in the crypto and financial markets have positioned the digital asset to outshine one of its most prominent detractors.
Meanwhile, amidst a mixed opening in the US stock market, crypto-related equities emerged as a standout performer on Monday morning, marking the final month of the year with impressive gains. Companies like Galaxy Digital, Marathon Digital Holdings, and Riot Platforms led the charge with double-digit rallies within the first twenty minutes of trading. Simultaneously, cryptocurrencies themselves, including Bitcoin and Ethereum, showed resilience with notable price surges. These bullish moves in the crypto space are driven by factors such as the ongoing optimism surrounding a bitcoin exchange-traded fund (ETF) and the unique trading dynamics of the crypto market, setting the stage for a fascinating year-end trading period.
Bitcoin Surpasses Warren Buffett's Berkshire Hathaway in Market Cap Showdown
In a surprising turn of events, the world of cryptocurrency has triumphed over one of its most vocal critics, legendary investor Warren Buffett, as Bitcoin's market capitalization has soared past that of Buffett's famed Berkshire Hathaway investment fund. Anthony Pompliano, a prominent venture capital investor and partner at Morgan Creek Digital, popularly known as "Pomp" in the crypto community, made the revelation on X, igniting a firestorm of discussion in both financial and crypto circles.
Buffett, often referred to as the "Oracle of Omaha," has been a consistent detractor of Bitcoin for several years. Despite his vocal skepticism, reports suggest that he may have a small stake in Bitcoin and TRON (TRX), courtesy of Tron founder Justin Sun. This contradiction between his public stance and potential private holdings has been a point of contention within the crypto community.
Pompliano, once a fervent Bitcoin evangelist, has recently diversified his investment portfolio, recognizing that Bitcoin should not be the sole focus of investors. His change of heart occurred between 2019 and 2022. In a letter to investors published in September 2022, he acknowledged that his prediction of Bitcoin reaching $100,000 within 2.5 years from its $12,000 price in 2019 had fallen short. Instead, Bitcoin surged to $69,000 in October 2021. This prompted Pompliano to remove the iconic "laser eyes" from his X profile picture and publicly admit that Bitcoin had humbled him.
Pompliano's post declared, "Bitcoin's market cap is now higher than Berkshire Hathaway's market cap." According to CoinMarketCap, Berkshire Hathaway's market capitalization stands at $788.13 billion, while Bitcoin's market cap dwarfs it at $813,538,305,656. In response to a comment on his tweet, Pompliano added, "Bitcoin is up approximately 1,000% in the last 5 years. Berkshire is up 76% in the same time frame."
Warren Buffett's disdain for Bitcoin is well-known in the crypto community. He famously referred to it as "rat poison squared" and has steadfastly maintained his negative stance over the years. His close associate and vice president of Berkshire Hathaway, Charlie Munger, was equally critical, describing Bitcoin as a "stink ball" disrupting traditional finance. Munger, however, recently passed away at the age of 99, while holding his position as vice president at Berkshire Hathaway until his death.
The question of whether Buffett still holds Bitcoin and TRON, which were gifted to him by Justin Sun during a charity dinner in 2020, remains unanswered. Sun, the founder of the Tron blockchain and former CEO, donated $4.5 million to a charity linked to Buffett, securing himself a dinner meeting. During the dinner, Sun attempted to simplify cryptocurrency concepts for Buffett and offered him a Samsung Galaxy Fold 2 phone with a built-in crypto wallet containing one Bitcoin and 1,930,830 TRX. Buffett later claimed that he gave away the smartphone with the crypto to the GLIDE Foundation, reiterating that he did not and would not own any cryptocurrencies.
As of 2023, Warren Buffett's portfolio boasts a substantial $118.5 billion. He ranks fifth on the list of the world's wealthiest individuals, trailing behind Elon Musk, Bernard Arnault, Jeff Bezos, and Larry Ellison. Meanwhile, Buffett is followed closely by Bill Gates, Mark Zuckerberg, and several other billionaires.
The recent turn of events, with Bitcoin surpassing Berkshire Hathaway in market capitalization, adds another layer to the ongoing debate surrounding cryptocurrencies and traditional finance. It remains to be seen how this development will impact Warren Buffett's views on Bitcoin and whether he will reconsider his stance in light of the cryptocurrency's growing dominance in the financial landscape.
Crypto-Linked Stocks Shine as Year-end Trading Heats Up
As the US stock market faced a mixed opening on Monday, crypto-related equities defied the trend with several publicly listed firms witnessing impressive rallies, marking the final stretch of a volatile year. Notable among them were Galaxy Digital, Marathon Digital Holdings, and Riot Platforms, all of which gained over 10% in the first twenty minutes of Monday's trading session.
Coinbase and MicroStrategy also performed strongly, posting approximately 8% and 9% gains, respectively. These gains further solidify the remarkable year that Coinbase, Marathon, and Riot have had, with all three companies poised to end the year with gains exceeding 300%.
In parallel to the stock market excitement, cryptocurrencies themselves were on the upswing. Bitcoin (BTC) surged by more than 4% in Monday's early morning trading session, marking a promising trajectory as it aimed to close out the year with gains exceeding 150%. Ether (ETH) joined the rally, posting a 1.4% increase on Monday and achieving an impressive 85% gain year-to-date.
Roshun Patel, a partner at Hack VC, commented on the resilience of crypto-related assets, noting that "Crypto trades while stocks are closed, so then they have to slingshot to maintain relative value." This unique trading dynamic has contributed to the notable gains in crypto-related equities.
A significant driver of market optimism remains the prospect of a Spot Bitcoin ETF. Patel emphasized that this narrative is not only influencing cryptocurrencies themselves but also their related stocks. In particular, Coinbase stands to benefit as it would likely serve as the primary custodian for an approved ETF, boosting its prospects in the market. Patel added, "I think stock market traders have a hard time underwriting BTC much higher, so their forward expectations of earnings for stocks, especially miners, are dampened to expected reality."
Bitcoin's rally, which briefly saw it touch $42,000 on Monday before settling around $41,600, is widely seen as a reflection of its leadership role in the crypto market. Noelle Acheson, author of the Crypto is Macro Now newsletter, emphasized that Bitcoin remains the "gateway" into the crypto market for many mainstream and large investors, as evidenced by its increasing market dominance.
In contrast, traditional financial markets faced a rocky start to the week. Major indexes such as the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all opened in the red. However, the Russell 2000, representing small-cap stocks, defied the trend by gaining nearly 3% at the opening bell.
Analysts suggested that for traders seeking alternative strategies to close out 2023, small-cap stocks may present a compelling opportunity. The recent rally in US small-caps, particularly the Russell 2000's 3% surge on Friday, hints at the possibility of a "dash for trash" rally in this segment for the remainder of the year.
Nicolas Colas, founder of DataTrek Research, highlighted the previous underperformance of small-cap stocks in 2023 due to concerns over profitability and rising interest rates. However, with the prospect of lower interest rates, small caps could be set to catch up, signaling a potentially exciting year-end for this segment of the market.
As 2023 draws to a close, the interplay between the crypto market and traditional financial markets continues to provide fascinating insights into the evolving landscape of investment opportunities.