Warren Buffett, the legendary investor known as the Sage of Omaha, has long been skeptical of cryptocurrencies. Once describing Bitcoin as “probably rat poison squared,” he later reiterated to CNBC that he was “almost certain they will come to a bad ending.”
Buffett’s investment philosophy has always centered around companies that produce tangible goods and offer long-term value—a strategy that has seen Berkshire Hathaway’s stock soar by approximately 52,000% over four decades. Yet even he appears to have crossed his own red line with the firm’s multimillion-dollar investment in a Brazilian crypto-linked bank. Whether this move pays off remains to be seen.
Meanwhile, the cryptocurrency market continues to exhibit all the hallmarks of speculative mania, evoking past financial frenzies such as the Dutch tulip craze and the South Sea Bubble.
Bitcoin recently surged to a staggering $109,000 in the run-up to Donald Trump’s inauguration before dipping to $91,200 amid uncertainty over the president’s impending tariff war with the U.S.’s major trading partners. The cryptocurrency has since rebounded to around $94,000, though some traders warn it could breach the critical $90,000 support level, leading to further volatility.
Adding to the turmoil, two high-profile casualties of this market fluctuation have been Trump and First Lady Melania’s own meme coins.
Launched on January 17, the $Trump token skyrocketed to a peak valuation of over $14.5 billion within just two days. However, it has since plummeted by two-thirds. Similarly, the $Melania token has shed 50% of its value following a significant sell-off, according to Forbes.
Although meme coins do not function as traditional cryptocurrencies, they generate massive trading fees. A Reuters investigation reports that trading fees linked to $Trump have surpassed $100 million in just two weeks.
Market bubbles have historically rewarded the savvy and punished the uninformed. Just ask the former directors of Barings Bank, who failed to grasp the complexities of derivatives trading and watched as a rogue trader led the institution to collapse.
The crypto market’s frenzied nature continues to divide opinion. Whether it is a revolution in finance or merely another bubble waiting to burst remains an open question.
