Bitcoin regains lost ground, while Buffett suffers heavy losses! Berkshire Hathaway reports nearly $50 billion loss in the first quarter.

Legendary investor Warren Buffett's asset management company Berkshire Hathaway announced today that it incurred a net loss of $50 billion in the first quarter of 2020, the highest in its history. The main reason cited was the severe impact of the COVID-19 pandemic wreaking havoc on global financial markets.

Stock Market Guru Buffet Also Suffers Losses

According to a report by CNBC , Berkshire Hathaway's net loss in the first quarter totaled $49.75 billion, compared to a profit of $21.661 billion in the same period last year. Class A shares reported a net loss of $30,653 per share, compared to a profit of $13,209 per share last year; Class B shares reported a net loss of $20.44 per share, compared to a profit of $8.81 per share last year. The losses caused by investments, mainly in common stocks, amounted to $54.52 billion.

The S&P 500 index dropped by 20% in the first quarter, with several large stocks held by Berkshire Hathaway experiencing even greater declines, including American Express, Bank of America, Wells Fargo, and the four major airlines (American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines). The report notes that Berkshire Hathaway's financial statements must list unrealized stock gains and losses based on accounting standards, leading to significant fluctuations in the company's net assets, which Buffett finds meaningless.

In its financial report, Berkshire Hathaway pointed out that most of its businesses were affected by the COVID-19 pandemic, with impacts ranging from "relatively minor to severe," and revenues from key operations in April had significantly slowed down. The company stated:

"At this time, we cannot reasonably estimate the duration and extent of the impact of the pandemic on our operations. Risks and uncertainties from the epidemic may affect our future revenues, cash flows, and financial condition, including the nature and duration of reductions or closures of our various facilities and the long-term impact on demand for our products and services."

Bitcoin Outperforms Stocks and Gold

During the global investment market crisis, Bitcoin was not spared and experienced an epic price collapse in mid-March. However, just as doubts emerged about the value of Bitcoin, it miraculously rebounded, reaching pre-March crash levels amid the stabilization of the global financial markets.

On the other hand, looking at the performance chart of Bitcoin, US stocks, and gold from the beginning of the year, during the mid-March sell-off, stocks and gold outperformed Bitcoin, but this trend has since reversed. In terms of performance from the beginning of the year to date, Bitcoin has been the most profitable asset among the three.

Related Reading

• Good News in COVID-19 Drug Trials; Dow Surges 532 Points, Bitcoin Outperforms S&P 500
• Is It Applicable to the Crypto Market? Buffett's Investment Advice to Young People: Understand Accounting, Focus on Quality Companies

Join Telegram now for the most comprehensive information on fintech, blockchain insights, and industry examples!