Berkshire Hathaway’s Missed Bitcoin Gains: A Critical Analysis
Berkshire Hathaway reported a headline profit of $12.3 billion for the second quarter of 2025, reflecting robust financial activity. However, a deeper examination reveals troubling undercurrents, particularly regarding overlooked opportunities in Bitcoin (BTC). This oversight may have significantly impacted Berkshire’s financial results, especially in light of a substantial equity loss.
The Cost of Conservative Investments
During the second quarter, Berkshire experienced a staggering $5 billion impairment on its Kraft Heinz stake. This contributed to a $4.60 billion equity method investment loss for the first half of the year. With net earnings sharply down from the previous year, the conglomerate’s stock performance has lagged behind both Bitcoin and the S&P 500 in 2025. Following Warren Buffett’s announcement of his impending retirement, shares have only risen by 3.55% year-to-date, in stark contrast to the S&P 500’s 7.51% increase and Bitcoin’s impressive 16.85% gain.
At the end of June, Berkshire held a staggering $100.49 billion in cash and cash equivalents, largely concentrated in low-yield Treasury bills. Had just 5% of this capital been funneled into Bitcoin at the beginning of 2025, Berkshire could have secured over $850 million in unrealized gains by August, based on BTC’s ongoing performance.
While this hypothetical windfall wouldn’t have completely offset the losses from Kraft Heinz, it would have provided a crucial buffer. Additionally, these gains could have offered greater flexibility in a year when the company refrained from conducting stock buybacks.
Bitcoin’s Outperformance Against Top Stocks
The stark contrast between Bitcoin’s performance and that of Berkshire’s top holdings — Apple (AAPL), American Express (AXP), and Coca-Cola (KO) — highlights the risks associated with a conservative investment strategy. Bitcoin’s returns have outstripped these iconic stocks in 2025, underscoring the shifts in market dynamics and investor sentiment towards alternative assets.
Buffett has historically dismissed Bitcoin, labeling it “rat poison squared” and asserting that it lacks intrinsic value and yield potential. Yet, the reality stands that Bitcoin has thrived amid a landscape marked by increasing ETF inflows and institutional adoption, presenting a compelling case for a re-evaluation of its role in investment portfolios.
Looking ahead, the strategic direction under Buffett’s chosen successor, Greg Abel, remains to be seen. Thus far, he has not publicly embraced Bitcoin or cryptocurrencies, leaving questions about Berkshire’s future engagement with digital assets.
The evolving landscape of investments and market conditions suggests that Berkshire Hathaway may need to adapt its approach to remain competitive. As the dynamics shift, investors are left pondering whether traditional paradigms are shifting in favor of more agile and responsive investment strategies.