Berkshire Hathaway outperforms S&P 500 again. Will Warren Buffett need Bitcoin to compete in 2025?

Warren Buffett’s Berkshire Hathaway did what it does best in 2024—beat the market. While the S&P 500 had a historic 24% gain, Berkshire came out on top again, sticking to its decades-old strategy of value investing.

But see, Wall Street isn’t what it used to be anymore, and 2025 is set to challenge even Warren’s legendary approach.

With a self-proclaimed “crypto president” in the Oval Office, Bitcoin crossing $100,000 and getting increasingly correlated to US stocks, we couldn’t help but wonder: will the Oracle of Omaha have to embrace Bitcoin to stay ahead?

Berkshire Hathaway’s success isn’t luck. It’s a strategy built on consistency, cash reserves, and a refusal to chase fads. But there’s no denying that Bitcoin, once dismissed by Warren as “rat poison squared,” is now a serious player in global finance.

Can Warren’s old-school methods hold up in what is widely expected to be the “Golden Age” of finance?

Berkshire Hathaway’s 2024 playbook

Berkshire Hathaway’s 2024 performance was a masterclass in patience. While the tech-heavy S&P 500 surged, driven by AI giants like Nvidia and Apple, Berkshire leaned into its traditional strengths. As of January 1, its Class A shares were trading at $677,200, above the $673,660 target set by analysts.

Key to this success is its diversified portfolio. Apple remains its crown jewel, making up 30-40% of its equity holdings. Coca-Cola, a Warren favorite since the 1980s, still pulls its weight with a steady 3.1% dividend yield.

Sure the company has underperformed the S&P 500 over five and ten years, lagging by 33% and 105%, respectively. But it’s still a bedrock investment—consistent dividends, pricing power, and a global brand that prints money.

But what really sets Berkshire apart is its cash. The company’s reserves surged past $300 billion in 2024, giving Warren the kind of flexibility most investors will only ever dream about. He is a legend, with a war chest that allows him to snap up opportunities when others panic.

Analysts predict this will be a major advantage in 2025, especially if tech stocks lose steam and value investing comes back into vogue.

The Bitcoin question: A threat or an opportunity?

For years, Warren has been the loudest critic of Bitcoin, calling it everything from “rat poison” to a “mirage.” His argument is simple: Bitcoin has no intrinsic value. But come on, it’s 2025, that view is kind of outdated now.

We are in a monster bull run, and institutional investors are piling in. BlackRock’s Larry Fink now calls it “digital gold.” Nearly everyone with a position under the incoming administration is pro-crypto, even the director of NASA. That’s how serious Trump is about loving Bitcoin.

At some point, it’s gonna get embarrassing for Warren that he is still holding out on Bitcoin. What more does he need? We all know that young and retail investors, the ones Berkshire needs to attract for long-term growth, are all-in on crypto.

They see Bitcoin as a hedge against inflation, a store of value, and the future of finance. If Berkshire ignores this trend, it risks losing relevance with this demographic.

Meanwhile, the S&P 500’s 24% gain in 2024 was driven by the so-called “Magnificent Seven,” tech giants like Nvidia and Apple. Nvidia alone jumped 171%, thanks to AI hype. But this tech-driven rally came at a cost.

The S&P recorded its first four-day losing streak to end the year since 1966. It’s a reminder that what goes up, eventually comes down. Berkshire, by contrast, plays the long game.

So will Warren ever adapt to Bitcoin? History says maybe. He once called tech stocks a bubble, only to invest billions in Apple. No matter which way he goes in the end, it’ll be historic to witness.