Warren Buffett is selling off stocks this year and hoarding USD.
Not exactly true... He's doing some restructuring and could be piling cash to make a major investment. He sold some Apple and bought Domino's and Pool (whatever that is).
Why? He clearly is expecting an economic downturn from Trump's tariffs and mass deportations. Americans have voted for massive changes to the US economy. Clearly the majority in the US feels these changes will be good for them. But Mr. Buffett clearly doesn't.
All of the selling happened before the election. He's taking some massive profits, which is what good investors do. And yeah, the S&P looks crazy overvalued after a giant multi-year run-up.
The question is, if he's right, what will a recession do to the price of Bitcoin?
Well, that is the question, and the answer is nobody knows for sure because Bitcoin has only existed in a bull market (minus the whole covid fiasco which America printed its way out of pretty quickly).
My own assumption is that it will be very negative for the price. Millions of individual Bitcoin/crypto investors will need to liquidate their holdings if they lose their jobs, or are afraid of losing their jobs. If inflation spikes, then interest rates will also spike, which will diminish economic growth, leading to mass layoffs--and everything Trump has promised will inevitably spike inflation (it remains to be seen if he will really do any of this though).
Is there a bull case for digital currencies during a US economic downturn though? What do you all think?
Is there a bull case for digital currencies during a US economic downturn though? What do you all think?
Bitcoin is pretty much a toy for the rich, and Wall Street sees it as having the highest risk of all high risk investments. So in a sudden economic downturn the price would indubitably drop due to its eccentricity as an investment class. However, if economic problems are caused by a devaluing dollar, then we could actually see a "flight to bitcoin".
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