Despite some calling him “Bitcoin Enemy Number 1,” Warren Buffet happens to have an indirect exposure to Bitcoin (BTC) via one of the investments of Berkshire Hathaway. The American multinational conglomerate holding company’s venture with crypto-friendly Nubank is now paying off as its stock surged 106% in just a year.
Berkshire Hathaway’s Clever Investment
Two years ago, Berkshire Hathaway surprisingly purchased 107 million shares of Nu Holdings valued at $750 million in two separate funding rounds. This was rather shocking because Nubank happens to be a “crypto-friendly” company offering cryptocurrency-related services to more than 1.35 million customers in Brazil. On the other hand, Berkshire Hathaway is headed by Warren Buffet who clearly is no fan of cryptocurrencies and has previously referred to Bitcoin as “rat poison.”
Despite Buffet’s apprehensions about crypto, it seemed that his investment in Nubank really paid off after the shares of the firm grew by 106% year-to-date (YTD), which even dwarfed the gains acquired by Buffet’s firm from two of its top holdings, Apple and Amazon. During that period, Berkshire Hathaway only reported gains of 36% and 54.65%, respectively, from the two companies.
Apple, in particular, comprises roughly 45% of Berkshire Hathaway’s $354 billion investment portfolio as of September 2023. Nubank’s performance has clearly outshone these tech giants, demonstrating the wisdom of their investment strategy.
Indirect Exposure to the Cryptocurrency Industry
Nubank is seen to be a crypto-friendly institution due to its plethora of crypto-related services for customers. These include Nubank, a digital financial services platform that facilitates trading in cryptocurrencies and Ether (ETH), and Easynvest, a trading platform that offers a Bitcoin exchange-traded fund (ETF) product. It should be noted that the company even launched a loyalty token on the Polygon blockchain.
Bitcoin Matching Nubank’s Performance
Remarkably, Bitcoin has matched the fortunes of Nubank in 2023. They are currently up 106% YTD as “Uptober” hit the market and there has been renewed excitement about Bitcoin ETFs. It’s also worth noting that Bitcoin’s ascent to parity with Nubank’s stock price has coincided with its decoupling from the stock market this month.
While the decoupling is certainly something to be optimistic about, some other analysts think that it is really the excitement over the Bitcoin ETFs that are currently causing the price increase in Bitcoin.
Nu Holdings’ Faith in Bitcoin
Notably, Nu Holdings made a significant move in May 2022 by allocating 1% of its cash holdings to Bitcoin. This decision signaled the company’s belief in Bitcoin’s potential to disrupt financial services in the Latin American region. With more than 80 million customers in Brazil, Nubank’s actions speak to the growing influence of cryptocurrencies in the financial sector.
Final Thoughts
While Warren Buffett may remain cautious about cryptocurrencies, the profitable journey of his indirect “crypto bet” with Nubank reflects the evolving landscape of the financial market. As Bitcoin and Nubank both continue to rise, it’s clear that this is a story worth watching.
