Warren Buffett defensive
Warren Buffett moves away from the cornerstones of value investing in the Corona crisis and sells Delta Airlines shares worth several million USD. The investment legend thus sends out a defensive signal. The reluctance of Berkshire Hathaway, Warren Buffett’s conglomerate, could affect not only the traditional markets, but also Bitcoin. Bitcoin is still in a consolidation phase despite the pending halving. We look at the current market situation.
It is unexpected news for many investors: Berkshire Hathaway is selling all shares of Delta Air Lines, American Airlines, Southwest Airlines and United Airlines. This means that investor Warren Buffett is pulling the ripcord. Buffett announced the decision during a virtual general meeting of Berkshire Hathaway.
In a commentary Buffett comments as follows: “We made this decision regarding the airline business. We have taken money out of the business, at a substantial loss, in fact […] We will not finance a company […] that we believe will eat money in the future.”
Implications for traditional markets?
At first glance, there are no apparent effects on the traditional markets. In fact, the S&P 500 was up about 1% on Tuesday. In recent weeks there have been increasing reports of a high correlation between the crypto-market and the major stock indices. Hence, the question arises as to how the BTC would react to another price slide.
What does the Bitcoin do?
Bitcoin continues to move sideways below the USD 9000 mark. A high trading volume of around USD 43 billion is a good sign that the bulls will push the price above this resistance in the near future. An even greater glimmer of hope is the upcoming BTC Halving Event. In just under a week, the coin rewards will be halved for the third time and the community is already arguing extensively about the possible consequences. In these discussions, however, the traditional markets should not be ignored. With a total market capitalization of around USD 250 billion, crypto-space continues to be a marginal market.
BTC on the verge of a crossroads
The digital gold is faltering. A few days before the BTC Halving Event, the No.1 crypto currency is facing massive resistance between USD 9500 and the magic USD 10000 mark. Of course the bulls could benefit from the volatility and the halving hype in the coming days. However, there is no guarantee of this. Rather, the focus these days is on the major trading centers and the consequences of the coronavirus pandemic.