Bitcoin
Berkshire Hathaway profits from crypto despite Warren Buffet’s stance of not buying even “if they were all offered to me for $25”
Berkshire Hathaway profits from crypto despite Warren Buffet’s stance of not buying even “if they were all offered to me for $25”
Despite longtime Bitcoin skeptic Warren Buffett maintaining his critical views on cryptocurrencies, Berkshire Hathaway Inc.BRK) continues to benefit financially through its investment in Brazilian fintech Nu Holdings Ltd.NO).
Although Buffett has been openly criticizes Bitcoin, referring to it as “rat poison,” Berkshire Hathaway made significant gains through its stake in Nu Holdings. Investing initially $500 million in a Series G funding round and an additional $250 million later, Berkshire’s involvement paid off.
Don’t miss:
In a 2018 interview with Yahoo Finance, the value of Bitcoin was questioned when Buffett said: “If you told me you owned all the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I would have to sell it back to you one way or another. It won’t do any good.” He considers that there is a lack of production and that it only depends on future price increases.
Nu Holdings, founded in 2013, launched the Nucripto platform in 2022, allowing users to trade more than 15 tokens. The company’s performance has been impressive, with a 100% increase in market share in 2023 and another 50% increase in early 2024.
This investment success has put Buffett in a tricky position, as the performance of Nu Holdings, which is up nearly 125% this year, stands in stark contrast to its negative stance on Bitcoin. Meanwhile, Bitcoin itself is having a remarkable year in 2024, significantly outperforming indices like the S&P 500.
Understanding the broader context surrounding Berkshire Hathaway’s involvement with Nu Holdings can help assess the importance of this development. Warren Buffett’s strong objections to Bitcoin date back several years. He always dismissed it as a non-productive asset with no intrinsic value.
Buffett’s indirect exposure to cryptocurrencies through Nu Holdings highlights a subtle shift in investment strategies. As reported earlier this year, Berkshire’s increased exposure to companies involved in crypto may reflect a buoyant market.
In early 2023, reports emerged that global fintech adoption was on the rise. This trend underscores why Berkshire remains committed to investing in fintech, despite Buffett’s personal misgivings (see Fintech Adoption On The Rise).
Buffett’s portfolio management has always emphasized long-term profitability over short-term market trends. This strategy may explain why Berkshire continues to support Nu Holdings despite Buffett’s well-publicized views on Bitcoin.
The story continues
The broader implication is that even strong critics like Buffett can find profitable opportunities in the growing digital asset ecosystem, signifying an important aspect of financial diversification and adaptation.
Read next:
“ACTIVE INVESTORS’ SECRET WEAPON” Supercharge Your Stock Market Game with the #1 “News & Everything” Trading Tool: Benzinga Pro – Click here to start your 14-day trial now!
Get the latest stock analysis from Benzinga?
This article Berkshire Hathaway profits from crypto despite Warren Buffet’s stance of not buying even “if they were all offered to me for $25” originally appeared in Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.