Legendary investor Warren Buffett’s Berkshire Hathaway has bought $1 billion worth of stock in Nubank, one of Brazil’s largest fintech banks focussed on cryptocurrencies.
Berkshire’s stake in Nubank isn’t it’s first. When Nubank went public in December 2021, Buffett’s group reportedly bought 30 million shares for $250 million. Nubank was valued at $41.5 billion at the time, according to a Coindesk analysis. In June 2021, Berkshire Hathaway purchased a $500 million interest in the company.
Given the risks, the investments are appealing. Buffett, known as the ‘Sage of Omaha,’ has long been opposed to Bitcoin, referring to it as ‘rat poison.’
“When you buy Bitcoin or another cryptocurrency, you’re not buying something that produces anything; you’re just hoping the next guy pays more. In an interview with Yahoo Finance, Buffett observed, “You only feel you’ll find the next guy to pay more if he thinks he’ll find someone who’ll pay more.”
Buffett’s partner and Berkshire Vice Chairman Charlie Munger have been a vocal opponent of cryptocurrencies, particularly Bitcoin, which he previously described as “disgusting and opposed to the interests of civilization.”
While Nubank does not allow consumers to trade cryptocurrencies, its investment division, NuInvest, does let them invest in Bitcoin exchange-traded funds (ETF).
Hathaway claimed it sold Mastercard and Visa shares worth $1.3 billion and $1.8 billion, respectively, in a US SEC filing revealing the latest transaction.
Is Warren Buffett finally on board with Bitcoin as a viable investment?
Berkshire Hathaway’s choice to sponsor Nubank marks a watershed moment in the company’s investment strategy. It’s a sign that the company is shifting its attention away from credit companies and toward fintech companies.
Nubank is also a major fan of digital currencies, and they even have a few bitcoin-related products. As a result, Buffett’s investment in the fintech startup could signal that he’s finally warmed up to cryptocurrencies, or at least cryptocurrency-related items.
Buffett will definitely benefit from Nubank’s expanded exposure to the crypto business, especially given his substantial ownership of the bank. Buffett will undoubtedly benefit from bitcoin, even if he does not believe in it.
Over the previous several years, the number of crypto-related financial products has increased dramatically. The number of crypto-related products has nearly doubled, according to Bloomberg Intelligence statistics, going from 35 to 80. The overall amount of assets held has also increased dramatically, from $24 billion in 2021 to $63 billion in 2022.