Berkshire Hathaway is in deep trouble as the Japanese bond market is unlocked, with Warren Buffett refusing to take a quick glance at Bitcoin that exceeded the record-breaking $111,000.
The current historic surge in Japanese bond yields threatens to blow up the exact strategy Warren used to justify his billion-dollar bet on five major Japanese traders.
While global investors are flooded with profits from crypto and bank records, Warren is doing the exact opposite. He is avoiding his only code exposure and doubles his play, which is currently bleeding from all sides.
Warren raised 281.8 billion yen in October 2024, and continued in April 2025 with a much lower 90 billion yen through the Ensemble Shake. These funds were used to build nearly 10% positions in Mitsubishi, Mitsui, Ito, Marveni and Sumitomo.
It worked at first. Buy shares borrowing at 0.5% interest and paying 5% dividends. Easy cash. But now, as Japanese bonds rise rapidly, they are torched to carry trade strategies. The new bond issue is even more expensive. Interest will be reduced. The profits disappear.
Japanese stocks decrease when you lose your stock valuation
The five trading companies have not held up either. In 2025 alone, Mitsui fell 20%, Ito lost 16%, and the rest is slipping. Higher yields usually show stricter policies, while stricter policies kill stock valuations. It is built on a particularly stable dividend.
These are included in the Berkshire portfolio in Japan. The damage gets worse when considering the trade tensions caused by Donald Trump’s latest tariffs.
Although Berkshire did not withdraw, the 90 billion yen bond issued in April this year was the lowest ever. It’s not flex. That’s a caution. Things are changing so quickly that the same asset Warren calls “long-term holdings” is below what he paid. And although he always claimed to prefer cheap stocks, these may be cheaper than he would be willing to admit.
Currency shaking and bond pressure weakens Berkshire hedges
There is another problem that Berkshire cannot dodge: the circle. The company’s bonds and dividends were all yen-based and should have served as hedges. If the yen falls, Berkshire’s debt will be easier to pay off. That hedge only works if the circle is weak.
However, the yen was faster when the Bank of Japan surprised the market with an interest rate hike in July 2024. As yields continue to rise, the yen can be climbed again. It changes the hedge against Warren. It reduces the value of the dollar in dividends, damages returns, and ruins the company’s ability to balance foreign books.
Still, despite the increased risk, Warren is stubborn. He does not sell Japanese status. He has not stepped away from bond strategies. And he certainly hasn’t touched Bitcoin. That’s after Berkshire dumped the entire stake in Nu Holdings, the Brazilian fintech company behind the encryption-friendly Nubank.
Bitcoin explodes when Warren leaves Nubank and throws out the code
Warren’s company closed Nubank in the first quarter of 2025 and left with a profit of $250 million. The move officially ended on Berkshire’s only link.
While Warren was cashing out, Bitcoin surged to $109,800, jumping again to $111,762 on Wednesday, spurring new institutional interest and support for the Senate’s genius law. The bill sets out new rules for stubcoin, providing a major boost to boost confidence in the space.
Traders also exploited the momentum that more than $900 million short positions were liquidated based on Coinglass data. Ethereum, XRP and Solana all followed Bitcoin leads and climbed when the crypto market screamed.
Meanwhile, Berkshire has increased its cash pile to $347.8 billion, mostly held by the US Treasury, after unloading its shares in Citigroup and Bank of America.
Warren once called Bitcoin “Rat Poison Square,” but it doesn’t seem like his opinion has evolved. Despite the rally and despite regulations, even Jamie Dimon is a longtime Bitcoin skeptic and even the CEO of JPMorgan tells clients that they can buy coins through the bank, but Warren is not upset.
At Berkshire’s latest shareholder meeting, an attendee named Jackie Han asked about the company’s views on real estate. Warren laughed, saying that if he had to choose between real estate and stocks for the rest of his life, he would take stocks with him every time.