Buffett Indicator Hits Record High: US Stock Valuations Have Surpassed the Internet Bubble

HashBandit · 2026-01-11T04:00:12+00:00

The current total market capitalization to GDP ratio of the US stock market has reached a historic high of 223%-230%, far exceeding the long-term average of 80%-100%. Buffett believes this indicator is an important tool for measuring market valuation, and its突破 usually signals market imbalance, which could lead to positive or negative turning points.

HashBandit

2026-01-11 04:00:12

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【Crypto World】According to Barchart data, the ratio of the total market capitalization of the US stock market to GDP (the Buffett Indicator) has now surged to 223%-224%, with some data sources even showing levels close to 230%. What does this mean? This is already an all-time high, surpassing the peak of the internet bubble in 2000 (which was about 150%) and even exceeding the high point after the 2021 pandemic.

In the long term, this indicator has hovered between 80%-100% on average since 1970. The 100%-120% range is generally considered a healthy “reasonable valuation” level by the market. But what about the current figures? They are far beyond this range.

Interestingly, Warren Buffett himself is quite fond of this indicator. He even straightforwardly states that it is the “single best indicator of market valuation.” According to an experienced value investing master, a breakout of this indicator usually signals some form of market imbalance—whether a positive or negative turning point is imminent. With the current data in front of us, everyone should have a clear understanding of what it implies.

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