- Berkshire Hathaway continues to rake in hundreds of millions of unrealized profits in its investment in the cryptocurrency-friendly bank Nubank.
- This comes amid the raining criticisms of Warren Buffet toward Bitcoin (BTC) and crypto in general.
Yes, you read that right. Warren Buffett, a.k.a. the Oracle of Omaha and Bitcoin Enemy Number 1, actually has exposure in cryptocurrency—albeit indirectly. Now, the investment of Berkshire Hathaway in Nubank is raking in gains.
Stellar Performance of Nubank
Despite the apprehension of its CEO in Bitcoin since it got on his radar, Berkshire Hathaway injected $500 million into the Brazilian neobank, Nubank, in 2021. It was eventually followed by another $250 million, and they haven’t sold any of their shares after. This represented approximately 0.1015% of the Nebraskan company’s market capitalization of $767.598 million as of November 2023.
While Buffett was busy bashing Bitcoin, even telling people that he wouldn’t buy it even if it was offered to him at $25 per BTC, Nubank turned out to be Berkshire Hathaway’s best-performing investment. In 2022, the value of the bank’s shares soared by 106%, which grew the stake of its institutional backer to over a billion dollars with around $250 million in unrealized profits.
By 2023, the same stock increased in valuation by nearly 100%. Then fast-forward this year, it’s up by 50%. Interestingly, Berkshire Hathaway is still HODLing on its slice at Nubank, which is an indication of its confidence in its investment there and a bullish signal for the crypto community.
Nevertheless, Buffet remains steadfast in his belief that Bitcoin and other cryptocurrencies have no intrinsic value whatsoever.
Warren Buffett on Bitcoin
Buffett was never a fan of Bitcoin from the get-go. One of his famous lines targeting the digital asset was when he referred to it as “rat poison squared,” echoing his right-hand man, the late Charlie Munger, who said it was “rat poison.”
Amid Nubank’s massive rise in 2022, Buffett confirmed that BTC has no value because it doesn’t produce anything, hence, he swore he would never own or buy any crypto. The strong backing of Berkshire Hathaway of Nubank speaks otherwise though.
From the looks of it, Buffett’s statements, which run contrary to the actions of his company, are nothing but a boomer’s unwillingness to admit that he’s been wrong about something. It is also an obvious attempt to gatekeep the market in favor of traditional finance.
This serves as a reminder of the criticisms hurled by Paypal co-founder Peter Thiel toward Buffet and JPMorgan Jamie Dimon two years ago when he called them out for their “finance gerontocracy.” He said that this type of attitude is outrightly dismissing the merits of Bitcoin and hindering its further progress.
For context, “gerontocracy” is defined by the Oxford Dictionary as “a state, society, or group governed by old people.”