Should Warren Buffet Have Invested in Bitcoin Rather than Apple?

This is one of many examples where BTC continues to perform better than traditional assets like stocks.

Buffet, Berkshire, and Apple

In the first quarter of 2016, Buffet purchased a reported 9.8 million shares of AAPL. Since then, Berkshire Hathaway, Inc., (BRKB) a multinational conglomerate holding company in which Buffet serves as current CEO and Chairman, has acquired a total of 252.2 million AAPL shares. After low-sales of iPhones in China during the fourth quarter of 2018 were announced by Apple on Jan 3, the value of AAPL plummeted by approximately 10 percent. As a result, the nearly $40 billion worth of AAPL shares owned by BRKB fell from $40 billion to around $36 billion.

Warren Buffett spent just over $1 Billion to buy 9.8 million shares of Apple in Q1 2016. Today that stake is worth ~$1.4 Billion.

If he had taken the money and bought Bitcoin instead, he would have $8.7 billion.

Maybe Mr. Buffett should start buying some rat poison 😉

— Pomp 🌪 (@APompliano) January 3, 2019

AAPL vs. BTC During the First Quarter of 2016

During the first quarter of 2016, AAPL reached a daily high of $110.42 on Mar 30 and a daily low of $92.39 on Jan 28. The average between the high and low was approximately $101.41. The original investment by Buffet, using the average value, amounts to an approximate $994 million. During the same period, BTC reached a daily high of $462 on Jan 7 and a daily low of $352.50 on Jan 16. The average between the high and low was $407.25. If $994 million were used to purchase BTC at this average price, approximately 2.44 million bitcoins would have been purchased.

Buffet’s Return on Investment on Jan 3

At 3:30 PM on Jan 3, the value of APPL closed at $142.09. Buffet’s original 9.8 million shares were worth an approximate $1.39 billion. Buffet’s initial investment increased by nearly 40 percent. However, had Buffet originally invested into BTC rather than APPL, he would have received a much higher return on investment. At 3:30 PM on Jan 3, BTC closed at $3,941.40. 2.44 million bitcoins would have been valued at over $9.6 billion, a return of investment of over 590 percent. [bctt tweet=”Had Buffet invested in Bitcoin rather than Apple, his original investment would be worth $8.21 billion more.” username=”beincrypto”]

APPL Value Rises

On Jan 4, the value of APPL began increasing. It opened at 12:30 PM EST at $147.37. Buffet’s initial investment had increased to an approximate $1,444.23 billion. His return-on-investment increased to over 44 percent. BTC’s value, on the other hand, decreased in value between 3:30 PM on Jan 3 and 12:30 PM on Jan 4 — opening at $3,894. Nonetheless, Buffet would still have received a much higher return on investment if he had invested in BTC than APPL. The approximate 2.44 million bitcoins he could have procured in 2016 in lieu of APPL shares would have been worth over $9.5 billion at 12:30 PM EST on Jan 4. Buffet’s return on investment into BTC would have been over 557 percent.

Conclusion

The crash in BTC value during 2018 when examined in isolation from other years and variables seems to paint Bitcoin in a poor light. However, when multi-year analyses are performed, it can be seen that BTC has gained greater value than other assets, including shares of APPL. Bitcoin is far from dead, and its value only continues to grow. Do you think that BTC will continue to perform better than APPL in future years? Let us know your thoughts in the comments below!