Note that some professional investors are now also expressing distrust of cryptocurrencies. As analysts at JPMorgan bank reported the day before, certain capital owners are favoring gold in the current environment. The reason for this is uncertainty in the regulation of cryptocurrencies by U.S. regulators.

Accordingly, if the US Securities and Exchange Commission, along with other agencies, were to bring clarity to the subject of the approach to digital assets, the latter would be contacted far more often.

What will happen to the economy and cryptocurrencies

Berkshire Hathaway sold $13.3 billion worth of shares in the first quarter of 2023 and also increased the proportion of cash and US Treasury bonds on its balance sheet. According to Cointelegraph sources, the company also allocated $4.4 billion to buy back its own shares and $2.9 billion to buy shares in other public companies.

Berkshire Hathaway is one of the indicators for the markets as the company has achieved tremendous popularity and reputation among a large number of traders and investors. At the same time Warren Buffett himself has repeatedly stated that the success of his brainchild depends largely on the growth of the US economy. Nevertheless, the situation may change in the future. Here is a relevant rejoinder from the legendary investor, in which he shares his view of what is happening.

Most of our firms will report lower earnings this year than last year. The last six months have seen an “incredible period” for the US economy come to an end.


Recall that the spring of 2023 was a difficult time for the US economy. The reason for the difficulties was the collapse of several major banks. In particular, Silicon Valley Bank, Signature and Silvergate all collapsed in March.


At the end of the first quarter of 2023, the amount of cash on Berkshire Hathaway’s balance sheet reached the $130.6 billion mark – the highest since the end of 2021. That means Buffett could be preparing for a potential plummet in the stock market and a massive buyout of companies during bad financial conditions, as he has done many times before.

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Warren himself has a negative attitude towards digital assets and has publicly stated his dislike for the concept of cryptocurrencies on more than one occasion in the past. At one time, even Tron founder Justin Sun, who bought the right to a charity dinner with the billionaire, tried to change his mind. Buffett has also been gifted millions of dollars in cryptocurrency, but he still stands his ground. In his perception, crypto is supposedly “nothing”, that is, an asset concept with no backing whatsoever. However, given Buffett’s age, there is no reason to expect him to understand the digital asset sector.

According to experts, the upcoming financial crisis could have a negative impact on Bitcoin and altcoins. For example, Bitcoin has now reached its highest level of correlation with the Nasdaq stock index at 0.42 per cent. According to Bloomberg analyst Mike McGlone, BTC could collapse even before stocks. Here’s a quote to that effect.

Bitcoin is up about 70 percent in 2023, while the Nasdaq stock index is only up 20 percent in the same time frame. Perhaps this rise was just a rebound in a more global bearish trend. The Fed continues to tighten its policy in May and is more inclined to stay the course.

The US Federal Reserve has once again raised its benchmark lending rate by 0.25 per cent in May to fight inflation. At the same time the markets are already laying down a high probability of a pause in permanent rate hikes for the first time in many months. An important factor in this process remains the release of information on the US consumer price index (CPI) today.

If the CPI falls below forecasts, the Fed might well change its strategy to a softer one, which would surely lead to a rebound in asset prices in various markets. Nevertheless, a CPI above the forecast would come as a shock to both cryptocurrency prices and the stock market.

Regarding Bitcoin itself: the prevailing view in the cryptosphere over the past few weeks has been that in a negative scenario, the coin would fall to the $25,000 line. That would be a “healthy correction” as part of BTC’s growth this year, analysts say.

However, the important thing to remember here is that the market will behave as it wants to. And analysts' forecasts won't hinder that in any way.

So far, the negativity in the market has been accompanied by an outflow of funds from investment cryptocurrency products. In the last week, the amount of assets withdrawn was equivalent to $54 million, which was the third negative figure in a row. So far, investors are not very confident about the future potential of the coin market.


We believe that the outlook for the impact of the financial crisis on cryptocurrencies is difficult to predict. Certainly, with a worsening economy, ordinary people will definitely not have much time to diversify into digital assets, but demand for the latter could become higher anyway. Still, as the events of March 2023 demonstrated, the collapse of big banks may well force investors to become more involved in decentralised money. The advantage of the latter is now particularly felt in the form of limited inflation - and sometimes deflation of the overall supply.


What do you think about this? Share your prediction in our cryptochat. There we discuss current news from the blockchain world and dream about the advent of a new bullrun.