Berkshire's Record Cash Spurs Caution Across Markets

Berkshire Hathaway, led by Warren Buffett, reported a record cash reserve of approximately $348 billion in Q1 2025, reflecting a continued cautious investment approach. Operating profit dropped 14% year-over-year to $9.6 billion, mainly due to weaker insurance underwriting impacted by $1.1 billion in wildfire losses and currency-related losses on non-dollar debt. Berkshire was a net seller of stocks for the tenth consecutive quarter, selling $4.7 billion and buying $3.2 billion in Q1, and did not conduct share buybacks. Buffett defended the high cash reserve, emphasizing the firm's opportunistic stance and preference for large investments only when compelling opportunities arise. The record cash position and conservative trading contributed to risk-off sentiment across traditional and crypto markets, including notable declines in Bitcoin and Ethereum prices and lower crypto trading volumes. Analysts view these moves as signals of caution, with markets awaiting potential large-scale investments when conditions improve.