Warren Buffett may still view cryptocurrencies and Bitcoin (BTC) as “rat poison squared,” but he is generating big profits from his position in a crypto-friendly bank in 2023.
Warren Buffett’s “crypto bet” up $130 million in 2023
The “Oracle of Omaha” purchased 107 million shares of Nu Holdings, a Brazil-based fintech company and owner of the crypto-friendly Nubank, via his firm, Berkshire Hathaway, in two separate rounds in 2021.
Berkshire invested $500 million in Nu Holdings in June 2021 and raised its stake by another $250 million in December 2021. The firm has not sold a single share since, according to its second quarter 2023 earnings report.
Nu’s share price is currently up nearly 106% year-to-date (YTD), meaning Buffett’s $750 million position is now worth around $879.50 million, assuming Berkshire has still not sold any of its Nu shares. However, at its peak in February 2022, the position was worth over $1 billion.
Why is Nubank crypto-friendly?
Nubank has been dubbed crypto-friendly because some of its divisions offer crypto-related services to over 1.35 million users. Therefore, investing in Nubank can be seen as having indirect exposure to the cryptocurrency industry.
That includes Easynvest, a trading platform that offers a Bitcoin exchange-traded fund (ETF) product, and Nubank, a digital financial services platform that offers BTC and Ether (ETH) trading. Nubank also launched a loyalty token on the Polygon blockchain.
Moreover, Nu Holdings allocated 1% of its cash holdings to Bitcoin in May 2022.
“This move reinforces the company’s conviction in Bitcoin’s current and future potential in disrupting financial services in the region,” Nubank stated at the time.
Nubank is the largest fintech bank in Latin America, with over 80 million customers in Brazil.
Nu crushes Apple and Amazon stocks
Underperforming Nu stocks are Buffett’s other top holdings, Amazon and Apple, which have gained 54.65% and 36%, respectively. Apple is by far the biggest holding of Berkshire Hathaway, comprising roughly 45% of its $354 billion investment portfolio as of September 2023.
Related: Bitcoin continues to outperform Warren Buffett’s portfolio, and the gap is set to widen
Nu has also outperformed Berkshire Hathaway’s stock, which has risen 9.25% YTD.
Bitcoin price performance catches up with Nu stock
Nevertheless, Bitcoin has finally caught up to the price performance of Nu stock this year. In fact, BTC price is now also up 106% YTD amid “Uptober” and recent Bitcoin ETF euphoria.
Interestingly, Bitcoin’s rapid rise to catch up with Nu over the past weeks has coincided with BTC decoupling from the stock market in October.
But while this is generally seen as a bullish sign, some commentators argue that Bitcoin ETF “hopium” is the driver of BTC price gains presently.
Indeed. Lots of historical data that shows bitcoin is tightly correlated to the stock market. The recent “decoupling” is driven imo by hopium over the ETF. But a significant downturn in stocks will bring BTC back to earth. pic.twitter.com/5hk523j3Gp
— Joe Carlasare (@JoeCarlasare) October 26, 2023
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.