Warren Buffett pivots to U.S. Treasuries — a bad omen for Bitcoin's price?
Warren Buffett has put most of Berkshire Hathaway's cash in short-term U.S. 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 BTC price in the near term.
Treasury bills, or T-Bills, are U.S. government-backed securities that mature in less than a year. Investors prefer them over money-market funds and certificates of deposits (COD) because of their tax benefits.
Related: Stablecoin issuers hold more US debt than Berkshire Hathaway: Report
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 to a near-zero yield a year ago. Similarly, the yield on U.S. one-year T-bill climbe from zero to 3.35% in the same period.
Meanwhile, non-yielding assets like gold and Bitcoin have dropped roughly by 2.5% and 57% since August 2021. The U.S. stock market benchmark S&P 500 likewise saw a decline, losing nearly 7.5% in the same period.
Related: BTC to lose $21K despite miners’ capitulation exit? 5 things to know in Bitcoin this week
Such a difference in performance presents T-bills as an ultra-safe alternative for investors when compared to 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
Read more on cointelegraph.com
