Berkshire Hathaway, the $503 billion conglomerate led by Warren Buffett, sold Goldman Sachs to buy one share of Barrick Gold, a Canadian gold company. Max Keiser, the founder of Heisenberg Capital and an early investor in Bitcoin, says this could help BTC reach $50,000.

Berkshire Hathaway’s quarterly shareholder report shows that Buffett cut its position in most of the big banks, Fortune reported Aug. 15. The company sold a substantially large portion of its shares in JPMorgan Chase, Wells Fargo and PNG.

Oracle in crisis: Did Warren Buffett lose his mojo?

What Buffett’s decision to go into a gold position instead of the banks shows about Bitcoin
Buffett’s decision to completely close Berkshire’s position at Goldman Sachs follows the bank’s second highest quarterly earnings of $13.3 billion. This suggests that Buffett is not comfortable betting on the long term in the banking industry.

Instead, Buffett bought a single share of Barrick Gold, and that share has reflected what has happened to gold for most of 2020. The company is a Canadian-based gold mining company, which recorded a 45 percent increase so far this year. After Berkshire’s investment, shares rose 8.11% in after-hours trading.

Max Keiser, an avid Bitcoin investor who has invested in companies such as Kraken and Bitfinex, believes that Buffett’s gold investment could benefit Bitcoin. He said that the positive sentiment around gold implies a higher valuation for Bitcoin, which some consider to be „digital gold. Keiser said:

„The $100 billion fund management business is less than 1% invested in gold. Buffett is now moving towards gold. A minimum global allocation of 5% is expected for gold. That means $5,000 for gold. Expect a global Bitcoin allocation of 1% ($1 trillion). This implies $50,000 for Bitcoin. Wait for Paul Tudor Jones (PTJ) to go up to 10%.

What Warren Buffett is doing in this crisis is a really worrisome „fallacy“.

The weekly price chart of Bitcoin


Global stocks are in „bubble territory“, but Bitcoin traders don’t worry about that
A former L/S portfolio manager and Ikigai Fund founder Travis Kling echoed a similar sentiment. Referring to Buffett’s 1998 skeptical statement about gold saying it is useless, Kling said:

„Today it was announced that Berkshire Hathaway has just bought its first gold shares. The reasons are obvious at this point. In case you’re wondering what the next few years will be like for Bitcoin, it will be like Buffett thought about gold in 1998.“

Bitcoin has shown some correlation with the precious metal lately

Although Bitcoin has outperformed gold since April, the price trend between gold and BTC has shown some correlation. Skew’s data shows that the two assets have increased in tandem over the past four months.

The simultaneous rise of Bitcoin and gold since the collapse of the global market in late March indicates that more investors are beginning to view Crypto Cash as a store of value.

Recently, MicroStrategy, a $1.4 billion intelligence conglomerate, bought $250 million of Bitcoin. The company said that BTC would act as the company’s primary cash asset, recognizing Bitcoin as a store of value and a potential safe haven asset.