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Berkshire Hathaway profits from cryptocurrencies despite Warren Buffet’s stance of not buying them even “if they were all offered to me for $25”
Berkshire Hathaway profits from cryptocurrencies despite Warren Buffet’s stance of not buying them even “if they were all offered to me for $25”
While longtime skeptic Warren Buffett maintains his critical view of cryptocurrencies, Berkshire Hathaway Inc. (NYSE:BRK) continues to benefit financially through its investment in Brazilian fintech Nu Holdings Ltd. (NYSE:NU).
Even if Buffett was openly critical of Bitcoin, calling it “rat poison,” Berkshire Hathaway has made significant gains through its stake in Nu Holdings. Investing initially $500 million in a Series G funding round and another $250 million later, Berkshire’s involvement has paid off.
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In the 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? ” It? I’d have to sell it back to you one way or another. It won’t do anything.” According to him, the company lacks production and relies solely on future price increases.
Nu Holdings, founded in 2013, launched the Nucripto platform in 2022, allowing users to trade over 15 tokens. The company’s performance has been impressive, with a 100% market surge in 2023 and another 50% increase in early 2024.
This investment success has put Buffett in a difficult position, as Nu Holdings’ performance, up nearly 125% this year, stands in stark contrast to his negative stance on Bitcoin. Meanwhile, Bitcoin itself is having a banner year in 2024, significantly outperforming indices like the S&P500.
Understanding the broader context surrounding Berkshire Hathaway’s involvement with Nu Holdings can help evaluate the significance of this development. Warren Buffett’s strong objections to Bitcoin date back several years. He has consistently dismissed it as a non-productive asset with no intrinsic value.
Buffett’s indirect exposure to cryptocurrencies through Nu Holdings highlights a nuanced shift in investment strategies. As reported earlier this year, Berkshire’s increased exposure to cryptocurrency companies may reflect a dynamic market.
In early 2023, reports emerged that global fintech adoption was on the rise. This trend highlights why Berkshire continues to engage in fintech investing 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 could explain why Berkshire continues to back 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 lucrative opportunities in the growing digital asset ecosystem, which spells out an important aspect of financial diversification and adaptation.
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This article Berkshire Hathaway profits from cryptocurrencies despite Warren Buffet’s stance of not buying them even “if they were all offered to me for $25” originally appeared on Benzinga.com
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