Warren Buffett, despite his skepticism towards cryptocurrencies and Bitcoin (BTC), has been making substantial profits from his investment in a crypto-friendly bank. In 2023, Buffett’s “crypto bet” has increased by $130 million.
Known as the “Oracle of Omaha,” Buffett’s firm, Berkshire Hathaway, purchased 107 million shares of Nu Holdings, a Brazil-based fintech company that owns the crypto-friendly Nubank. This investment was made in two separate rounds in 2021, with Berkshire investing $500 million in June and an additional $250 million in December. Berkshire Hathaway has held onto its shares since then, according to the company’s second quarter 2023 earnings report.
As a result of the rise in Nu’s share price, which is currently up nearly 106% year-to-date (YTD), Buffett’s $750 million position is now valued at around $879.50 million, assuming Berkshire has not sold any of its shares. At its peak in February 2022, the position was worth over $1 billion.
Nubank is considered crypto-friendly due to its various divisions that offer crypto-related services to over 1.35 million users. By investing in Nubank, Buffett indirectly gains exposure to the cryptocurrency industry. This includes Easynvest, a trading platform that offers a Bitcoin exchange-traded fund (ETF) product, and Nubank, a digital financial services platform that facilitates BTC and Ether (ETH) trading. Nubank also launched a loyalty token on the Polygon blockchain.
Additionally, Nu Holdings allocated 1% of its cash holdings to Bitcoin in May 2022, further signaling its belief in the potential of Bitcoin to disrupt financial services in the region. Nubank, with over 80 million customers in Brazil, is the largest fintech bank in Latin America.
Compared to Buffett’s other top holdings, Amazon and Apple, Nu stocks have outperformed both. Amazon and Apple gained 54.65% and 36% respectively, while Nu’s stock soared. Berkshire Hathaway’s stock, in which Buffett holds a significant stake, has risen 9.25% YTD.
Interestingly, Bitcoin’s price performance has also caught up with Nu stock this year. Both have seen a 106% increase in value YTD, with Bitcoin experiencing a surge lately, attributed to “Uptober” and the hype surrounding the approval of Bitcoin ETFs.
Moreover, Bitcoin’s recent decoupling from the stock market in October has been seen as a bullish sign by many. However, there are arguments that the surge in Bitcoin’s price is driven by the hopes of Bitcoin ETF approvals.
It is important to note that this article does not provide any investment advice or recommendations. Readers should conduct their own research and analysis before making any investment decisions.