Bitcoin Goes Wild! Has Buffett Also Jumped In? Will Latest Bull Run Trigger Massive Damage!

Bitcoin has entered a wild "absorption" mode! Is a new Bitcoin bull run coming? The latest cycle of Bitcoin's prosperity and recession is a terrifying prospect.

Bitcoin broke through the $54,000 barrier

On February 27th at midnight, the Bitcoin market experienced a sharp surge, breaking through the $54,000 mark and then skyrocketing to a high of $57,500 per coin, with a daily increase of over 10%, setting a new record since 2022.

At the beginning of this month, the Bitcoin price was still around $43,500 per coin, which has increased by 29.43% in nearly a month, reaching a high of $51,100 on February 15th, exceeding its December 2021 peak and surpassing the $50,000 mark for the first time since then.

On January 10th, the US Securities and Exchange Commission (SEC) approved the application of 11 institutions to launch Bitcoin spot ETFs, including Grayscale and BlackRock. The 11 Bitcoin spot ETFs are now listed on three major exchanges - Nasdaq, NYSE, and CBOE - with a total trading volume of $46 billion on their first day.

According to Dune data, as of February 25th, the 11 ETFs collectively held between 619,491 and 732,549 Bitcoins, an increase of 113,058 Bitcoins. The total holding value is 73.2 million Bitcoins, with a management scale ranging from $285.9 billion to $372.1 billion, resulting in an increase of $8.6 billion.

Has Buffett also jumped in?

He may have already opened up a crypto currency exposure

A recent report spread like wildfire through the "cryptocurrency circle" that Warren Buffett has invested in cryptocurrencies, according to the latest developments from Omaha's Oracle, Warren Buffett, who may have direct and indirect exposures to cryptocurrencies more than he knows.

Berkshire Hathaway is a holding company for multiple companies under Buffett's control, which invested $5 billion in Nubank in June 2021, leading the G-round financing. When the bank went public in December of that year, its valuation reached $41.5 billion. According to reports, Berkshire Hathaway acquired 30 million shares at a total price of $2.5 billion.

Interestingly, Berkshire Hathaway sold 127,000 shares of Visa and 30,200 shares of Mastercard earlier this year. The company sold these stocks for $31 billion and bought new stocks worth $10 billion, increasing its exposure to Nubank.

Nubank is a digital bank headquartered in Brazil, which does not engage in cryptocurrency trading but allows users to invest in cryptocurrency exchange funds (ETFs) through its investment arm NuInvest. The company launched a new product called Nucripto in 2022, allowing users to buy, sell, and trade over 20 types of cryptocurrencies, including Bitcoin and Ethereum.

Recently, Nu Bank announced that it has partnered with Polygon, a technology platform connecting and developing projects and blockchains compatible with Ethereum, to launch its own cryptocurrency.

There is currently no clear evidence of Buffett directly investing in cryptocurrencies. Buffett was once one of the biggest opponents of Bitcoin, stating that even if the price drops to $25, he won't buy it. He also called Bitcoin "rat poison" and said that its ultimate outcome will be bad for investors.

Will Bitcoin's latest bull run trigger massive damage?

Don't follow blindly! Why did Bitcoin experience such a big surge at the beginning of this year? The Bitcoin spot ETF is attracting more capital, and the expectation of interest rate cuts by the Federal Reserve is also having a positive impact. Global economic growth expectations are improving, and investors' preference for risk assets is increasing.

Moreover, the unique value storage and potential appreciation opportunities offered by cryptocurrencies have made them popular among users. Financial derivatives and leveraged trading have amplified market volatility. With high leverage, even small price movements can lead to rapid price swings, triggering forced liquidation and further price fluctuations. This mechanism may accelerate Bitcoin's price surge in the short term.

However, this also means that Bitcoin's transactional volatility is high and unpredictable, with the possibility of being controlled by large institutions. Most investors are easily caught up in this vortex. Whether it's going long or short, except for a few professional high-frequency traders and institutional players, most investors will find themselves trapped.

A European central bank expert harshly criticized Bitcoin in a blog post, saying: "For followers, the official approval has confirmed that investing in Bitcoin is safe, with previous rebounds proving an unstoppable victory. We disagree with both views and reaffirm that Bitcoin's fair value remains zero." He believes that Bitcoin lacks cash flow or other returns based on its value, making it a bad investment.

He also mentioned that the use of cryptocurrencies for anonymous online criminal activities will further erode their potential as a daily payment method. Moreover, the mining of Bitcoin continues to raise environmental concerns.

Therefore, ordinary users should not blindly follow the trend and invest in Bitcoin without considering their own investment goals and risk tolerance. They must fully understand the risks involved and assess their ability to take on risk. Bitcoin's price may fluctuate wildly in the short term, posing a big challenge for investors seeking stable returns.