Warren Buffett’s Berkshire Hathaway parks $1B in crypto backer

Warren Buffett did not mince words when he once called Bitcoin, the largest crypto, “rat poison”. One of his closest associates, Charlie Munger, who also serves as the Vice Chairman of Berkshire Hathaway, once sought a ban on cryptocurrencies.

But the growing popularity of crypto assets, which now have S&P Dow Jones indices tracking the price movement, seems to have compelled Berkshire Hathaway to bet on a company that enables investments in crypto ETFs.

Warren Buffet Nubank Investment

Buffett’s Berkshire Hathaway has parked a whopping US$1 billion in Nubank. The investment, which came on the heels of Berkshire Hathaway selling shares held in Visa and Mastercard, was made in the last quarter of 2021, according to the filing with the SEC.

Earlier, Berkshire Hathaway had invested US$500 million in Nu Pagamentos S.A. when Nubank had yet to become a publicly traded company.

Also read: What is crypto staking & which are the top staking tokens?

Nubank crypto services

Nubank has an investment arm, NuInvest, which facilitates investments in cryptocurrency ETFs. Nubank is a large fintech player in Latin America, and it primarily offers digital banking services, which includes credit cards and remittances. The bank listed on the New York Stock Exchange in December last year, where it made a stellar debut with 15 per cent gains at the close of its first day.

Nubank stock

The Nubank stock, which is listed on NYSE under ticker NU, has a market cap of over US$40 billion as of now. The stock is down nearly 3.5 per cent on a year-to-date (YTD) basis

Also read: What is Mask Network & its crypto’s price prediction?

Warren Buffett and cryptocurrencies

Unlike other billionaires like Elon Musk and Jack Dorsey, Buffett criticizes cryptocurrencies.

One of the most closely-tracked investors in the world, Buffett favors traditional investment assets, and he even talked about his inclination toward S&P 500 stocks in the recent past. According to reports, his close associate Munger lately referred to cryptocurrencies “like some venereal disease”.

Bitcoin’s performance

Warren Buffett’s criticism of cryptos does not appear to be totally unfounded. After peaking to nearly US$68,000 in November last year, Bitcoin has lost substantial value. As of now, Bitcoin’s price is nearly US$43,500, which is even lower than the price at the beginning of 2022. As a matter of fact, Bitcoin’s market cap has topped US$1 trillion multiple times, but as of now, it is approximately US$827 billion.

Also read: BTT, SHIB & XEC: Top 3 cheap cryptocurrencies with market cap over $1B

Altcoins’ performances

Though Bitcoin remains the largest crypto with a share of over 40 per cent in the aggregate market cap of all cryptos tracked by CoinMarketCap, altcoins like Ether and BNB also command a very high market cap.

But almost every altcoin is trading at a value lower than their respective all-time high price. Some experts say that the cryptocurrency market’s dull phase owes to fears of rate hikes by the Fed. Riskier assets include stocks and cryptos, which do not provide fixed returns, and such assets tend to underperform when rates are hiked by central banks.

Also read: Canada Emergencies Act: Cryptos come under ‘terrorist financing’ laws

Data provided by CoinMarketCap.com

Viewpoint

That Buffett’s Berkshire Hathaway has invested such a large sum in a company that enables investments in crypto ETFs may bring cheer to Bitcoin backers. At the same time, Nubank is an emerging banking company with expertise in financial technology, and this could be the primary reason behind Berkshire Hathaway’s investment, with little regard to NuInvest’s crypto services.