Summary:
Warren Buffett previously called Bitcoin 'probably rat poison squared'.
Berkshire Hathaway invested $500 million in Nu Holdings and an additional $250 million.
Nubank Cripto supports major cryptocurrencies and has seen a 34% increase in stock value.
Berkshire's holdings in Nu rose from 0.1% to 0.4% recently.
Buffett's investment stance on cryptocurrency may be changing despite his previous skepticism.
Berkshire Hathaway CEO and chairman Warren Buffett has long been vocal about his disdain for cryptocurrency, famously labeling Bitcoin as "probably rat poison squared" during the 2018 Berkshire Hathaway annual shareholder meeting. Buffett expressed his skepticism, stating, "In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending."
However, recent developments suggest a potential shift in perspective. Berkshire Hathaway has made a significant investment in Nu Holdings, a Brazilian digital banking company that operates its own cryptocurrency platform. Initially, Buffett's firm invested $500 million in a Series G funding round in 2021, followed by an additional $250 million.
In 2022, Nu launched its cryptocurrency platform, Nubank Cripto, supporting major cryptocurrencies like Bitcoin, Ethereum, and Polygon, as well as others like Uniswap and Chainlink. This investment has now grown, with Berkshire's holdings in Nu increasing from 0.1% at the end of 2022 to 0.4% by the third quarter of fiscal 2024, translating to over 86 million shares valued at nearly $1.2 billion.
Despite Buffett's earlier claims of not understanding cryptocurrencies, it seems Berkshire Hathaway is benefiting from a sector he previously dismissed. With Nu Holdings’ stock price up nearly 34% year over year, Buffett might need to reconsider his position on cryptocurrency's impact on investment strategy.
Berkshire Hathaway maintains a conservative investment approach, holding over $325 billion in cash and equivalents, primarily in U.S. Treasury bills. As Buffett himself noted, "I get into enough trouble with things I think I know something about; why should I take a long or short position in something I don’t know anything about?"
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