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Buffett, bonds and Bitcoin

The Sage of Omaha is cynical on fixed income as well as crypto assets.
Buffett, bonds and Bitcoin
  • Warren Buffett's letter to shareholders adds fuel to the debate on bonds
  • Bitcoin too volatile to be rates hedge
  • Reflation trade still on despite jitters

Warren Buffett doesn’t believe in Bitcoin and, as he made clear in his annual letter to Berkshire Hathaway (US:BRK.A) shareholders, he is no fan of bonds either. The world’s most famous investor wrote that fixed income investors face a bleak future as Berkshire pared back slightly on its corporate credit holdings.

Government bond yields have risen on the back of investors’ inflation fears, which has upset the delicate balance of capital markets. Low central bank interest rates and vast quantitative easing (QE) programmes throughout the pandemic drove the price of government bonds to record highs. In many cases yields (which move inversely with prices) are negative after inflation.

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