Key Insights
- Warren Buffett describes the recent 10 percent market crash in March as “nothing” compared to past 50 percent crashes.
- Berkshire Hathaway’s cash and cash equivalent position is at an all-time high of $373 billion, signalling a massive “wait-and-see” approach.
- The ongoing US-Iran conflict and the closure of the Strait of Hormuz have been causing market volatility, thereby driving up the price of energy.
- While the Dow and the Nasdaq have fallen to the correction zone, Buffett argues that the stock market has yet to get cheaper.
- Bitcoin has a high correlation with the S&P 500 stock index at 0.47. This implies that a major event in the stock market will lead to a huge liquidation in the crypto market.
- Berkshire has been aggressively selling tech assets such as Apple and has been buying short-term U.S. Treasury bills.
The “Big Short” or Just Big Patience? Buffett Peers at a Deeper Bottom for Stocks and Risk Assets
In one of the few and open interviews with CNBC, legendary investor Warren Buffett has given a chilling warning to Wall Street: the recent correction is just a dot on the radar. The real pain has not come yet as the Dow Jones Industrial Average and the Nasdaq Composite approach the first quarter of 2026 with double-digit losses, which the “Oracle of Omaha” is remarkably unimpressed by.
- The “Big Short” or Just Big Patience? Buffett Peers at a Deeper Bottom for Stocks and Risk Assets
- The $373 Billion War Chest
- The Geopolitical Trigger: Iran and the “Scare Trade”
- The Bitcoin “Rat Poison” Connection
- The Reason Valuation Still Matters
- Background: Cash Moves in the History of Berkshire
- Frequently Asked Questions
“Since I have been in charge of Berkshire,” Buffett said, “it has fallen over 50 percent three times. This is nothing, as compared to the markets of… the 2007-2008 period.”
The $373 Billion War Chest
The deeds of Buffett are louder than his words. Based on recent filings, Berkshire Hathaway has swelled its cash position to an unbelievable $373 billion. This is not a safety net; it is a predatory war chest. As retail investors have been buying the dip in stocks and Bitcoin, Buffett has been a net seller in 13 straight quarters.
The Dow Industrials have been hovering around 45,216, and the S&P 500 is languishing at 6,343. A 5 percent to 6 percent discount appears to the typical trader. It is a rounding error to Buffett. “We are not in it to get 5 percent or 6 percent,” he said, suggesting that Berkshire is biding its time before it can get a systemic clearance sale and then put its billions to work. This defensive stance is particularly interesting considering that Greg Abel officially became the CEO on January 1, 2026, and Buffett is still the Chairman Emeritus to lead capital allocation.
The Geopolitical Trigger: Iran and the “Scare Trade”
The chaotic trade of an AI scare and the intensification of the conflict in Iran have characterized the first quarter of 2026. When the Iranian forces successfully blocked the Strait of Hormuz, energy prices shot up, plunging major indices. The S&P 500 fell 5.1% in March alone. Some analysts are optimistic that the recent de-escalation rhetoric by Washington would lead to a V-shaped recovery, but Buffett is not.
The market mood has shifted towards a rotation out of tech giants such as Nvidia and Microsoft (the latter fell 23.4% in Q1) and into so-called “HALO” stocks: heavy assets with low obsolescence. Berkshire has been making the right moves as per this rotation. The company has reduced its Apple stake and cut Bank of America investments by almost half, preferring cash-laden Treasury bills, which now yield about $13 billion a year of risk-free income.
The Bitcoin “Rat Poison” Connection
Although Buffett continues to be a loud critic of Bitcoin, his macro perspective cannot be overlooked by the crypto market. The S&P 500 and Bitcoin correlation are still stubbornly high in 2026. At the moment, Bitcoin (BTC) is hovering around a vital support level of $68,000 following a monthly low of around $60,000.
Should Buffett be right and equities are about to experience a 50% “real” crash, the history of “risk-off” events will dictate that crypto will be the first asset to be sold. According to analysts at TradingView, a violation of the $59,400 mark (the 200-week SMA) by BTC may cause a wave of forced deleveraging. This would probably be a repeat of the 2018/2019 cycles of “crypto winter” that the market is frantically attempting to evade. Although the latest ETF inflows amounted to $1.32 billion in March, the technical picture is still weak since the overall equity market is still overvalued.
The Reason Valuation Still Matters
The “Buffett Indicator” (market cap to GDP ratio) is currently showing a “red” extreme at 220%. This indicates that the macro market remains overvalued historically, even after the recent March shivers. The fact that Buffett has shifted to U.S. Treasury bills, which are currently paying off at about 4.25%, demonstrates that he is more than content to be paid to wait until the mania in both AI stocks and digital assets subsides.
“This is not something to get you excited and believe that there are huge valuation opportunities,” Buffett concluded. To the crypto-native investor, the message is easy to understand: when the king of value investing believes that the stock market is still too high, the bottom of Bitcoin might be far lower than the current dip indicates. Traders are closely monitoring the $72,600 resistance level of Bitcoin; failure to regain this might be an indication that the “Oracle” is correct in his prediction of a deeper move downwards.
Background: Cash Moves in the History of Berkshire
Warren Buffett has a record of collecting cash before the music stops playing.
- 1998: Buffett started to reduce exposure and raised his cash hoard to 23% of total assets just before the Dot-com bust.
- 2007: Berkshire hesitated when the housing bubble was growing, only to intervene as the “lender of last resort” to companies such as Goldman Sachs when it crashed.
- 2026: With $373 billion in cash, Berkshire now holds more liquid assets than many small countries. This record pile was built through consistent selling of Apple, Amazon, and Bank of America throughout 2024 and 2025.
Also Read: Is it Still Possible for Bitcoin to Crash to Zero?
Frequently Asked Questions
What does Warren Buffett mean by saying the March dip is “nothing”?
Buffett considers long-term cycles. He has undergone several times when the market has declined by half or even more. A 10% correction to him is a normal market variation, and not a value opportunity.
What does this mean for Bitcoin and Ethereum?
Strong correlation between stocks and crypto implies that in the event that Buffett is correct about a further stock crash, Bitcoin will be sold heavily as investors demand liquidity. The current resistance is at $70,000, and in case of failure, a re-test of $54,000 may occur.
What is Berkshire Hathaway purchasing as opposed to stocks?
They have a huge investment in short-term U.S. Treasury bills. The company has also, in the recent past under Greg Abel, resumed selective buybacks of its own shares and augmented interests in energy plays such as Chevron and Occidental Petroleum.
Is there any “Buffett-approved” crypto?
No. Buffett famously called Bitcoin “rat poison squared.” However, his principle of “buying when there is blood in the streets” is often used by crypto whales to identify market bottoms during periods of extreme fear.
Disclaimer: BFM Times acts as a source of information for knowledge purposes and does not claim to be a financial advisor. Kindly consult your financial advisor before investing.
