Warren Buffett is no stranger to making headlines, but his latest move has Wall Street—and the crypto world—buzzing. By mid-2025, Buffett’s Berkshire Hathaway amassed a staggering cash reserve of approximately $350 billion, the largest ever held by a U.S. public company, according to Cointelegraph and Maverick Equity Research. This mountain of liquidity, comprised of Treasury bills and cold, hard cash, now represents about 50.7% of Berkshire’s shareholders’ equity and nearly 30% of its total assets as of the first quarter of 2025.
Why such a dramatic shift? For Buffett, history has a habit of repeating itself. The legendary investor has a long track record of building up cash when markets seem frothy—just before the bubbles burst. Back in 1998, Berkshire cut back on stocks and boosted its cash to $13.1 billion, about 23% of assets. By mid-2000, as the dot-com bubble was about to pop, cash peaked at $15 billion, or 25% of assets. Fast forward to 2005, and the cash pile hit $46.1 billion, a hefty 51% of shareholder equity. It stayed elevated through 2007, just ahead of the 2008 financial crisis, at $44.3 billion—about 29% of assets. Each time, Buffett’s caution seemed prescient.
So, what’s got Buffett spooked this time? The answer lies in the numbers swirling around the Nasdaq Composite. The index’s market capitalization has soared to a jaw-dropping 176% of the U.S. M2 money supply, far above the 131% peak during the dot-com era, as Maverick Equity Research points out. Against U.S. GDP, the Nasdaq now stands at 129%, nearly double its 2000 high of 70%. These figures highlight just how far stock prices have sprinted ahead of both the money supply and the broader economy. If that doesn’t set off alarm bells, what will?
But there’s another twist to this story—Bitcoin. The world’s most famous cryptocurrency has been on a tear, nearly doubling in value over the past year and reaching a record $124,500 in August 2025. The catch? Bitcoin and the Nasdaq have been moving in lockstep, showing a 52-week correlation of 0.73. That means, more often than not, Bitcoin rises and falls with tech stocks. According to Cointelegraph, many analysts see Buffett’s ballooning cash reserves as a warning sign for both equities and crypto. If the Nasdaq stumbles, Bitcoin could take a tumble, too.
Yet, the ultimate fate of Bitcoin may hinge less on stock market jitters and more on the flow of money itself. The U.S. M2 money supply—which tracks all the liquid cash and deposits sloshing around the economy—has started to pick up speed after a sleepy stretch. By July 2025, M2 was up 4.8% year-over-year, reaching $22.1 trillion. That’s the fastest growth since early 2022. Earlier in the year, growth was closer to 2.4%, but the pace is quickening, and that’s got people talking.
Why does this matter for Bitcoin? Historically, every time liquidity re-accelerates, Bitcoin eventually follows. After the 2020 monetary expansion, Bitcoin rocketed from $3,800 to $69,000 as global M2 ballooned. As analyst CryptoRodo notes, “Global M2 (money supply) has historically led Bitcoin by ~12 weeks. Every time liquidity re-accelerates, BTC eventually follows.”
This isn’t just a U.S. story, either. More than 20 central banks around the world have cut interest rates in 2025, according to Cointelegraph. The Federal Reserve is widely expected to follow suit, with economist Daniel Lacalle forecasting that annual M2 growth could return to the 10%-12% range. If that happens, the flood of new money could buoy both stocks and crypto, at least for a while.
Of course, there are no guarantees. Buffett’s strategy is all about caution when others are greedy. His cash hoard is a signal that he sees risk ahead, not just in equities but in the broader financial system. As Cointelegraph observes, “Buffett’s caution may indicate a coming correction, but the potential for monetary easing offers a counterbalance that could support asset prices, including Bitcoin, if implemented effectively.”
So, where does this leave the average investor? On one hand, Buffett’s move could be interpreted as a harbinger of trouble, especially with tech stocks and crypto sitting at all-time highs. On the other, the prospect of renewed monetary easing and a surging money supply could keep the party going—at least until the music stops.
It’s a classic case of conflicting signals. The record-breaking cash pile at Berkshire Hathaway is a clear sign of caution, echoing moves Buffett made before the dot-com bust and the 2008 meltdown. Meanwhile, the Nasdaq’s eye-popping valuations suggest that risk is running hot, and Bitcoin’s tight correlation with tech stocks means it isn’t immune to a market shakeout.
But for those who believe in the power of liquidity, the story isn’t all doom and gloom. If the Federal Reserve and other central banks keep pumping money into the system, history suggests that Bitcoin and other risk assets could continue to thrive. The key, as always, will be watching the flow of money—and trying to stay one step ahead of the crowd.
One thing’s for sure: with Buffett on the sidelines and the money spigots opening up, the second half of 2025 promises to be anything but dull. Investors would do well to keep their eyes on both the cash piles and the printing presses. After all, as Buffett himself has shown time and again, the smart money often waits for the right moment to pounce.
With markets at a crossroads, the interplay between caution and liquidity will shape the fortunes of stocks and crypto alike. As history has shown, those who pay attention to both are best positioned to navigate the twists and turns ahead.
