As the saying goes, “If you can’t beat them, join them!” This appears to be the case with the latest acquisition of Warren Buffet of Bitcoin, albeit it was via one of his holdings.
Bitcoin Enemy Number 1
The Berkshire Hathaway CEO’s thoughts on Bitcoin and cryptocurrency, in general, are well known to the public. From the start, he had shown utter distaste for them. Even his right-hand man and vice chair Charlie Munger echoes the same sentiments over the matter.
When Bitcoin exploded in the crypto scene and started gaining traction of about $100, Munger can be famously quoted telling an interviewer that it is “rat poison”, among other negative things. When it continued to climb up, Buffet followed up the statement of his right-hand man by saying that Bitcoin is “rat poison squared”.
The Oracle of Omaha also stated that it is a non-productive asset, unlike stocks that earn money. He said that it is just someone paying somebody else to own the same thing.
Despite rat poison having good uses over civilizations, the context of the two Berkshire Hathaway key execs paints it as something to be despised for some reason. For this, billionaire venture capitalist Peter Thiel dubbed Buffet as “Enemy No. 1” of crypto and he likewise called him the “sociopathic grandpa from Omaha”.
The Winds of Change
Although Buffet was continuously portrayed as the antagonist of crypto investors and enthusiasts over the years, Berkshire Hathaway invested $500 million in Nubank when it went public in June 2021. The largest Brazilian digital bank is seen to be crypto-friendly. Therefore, it was considered to be the Oracle of Omaha’s eventual exposure to cryptocurrency.
The following year, Nubank announced its new venture that allows its customers to trade Bitcoin and Ethereum on its platform. Moreover, the company revealed that it is allocating around 1% of its cash for the acquisition of Bitcoin as support to the crypto industry.
Under this setup, Paxos is responsible for providing the blockchain infrastructure of Nubank. The tech firm handles the crypto trading and custody service of Nubank.
The new crypto trading service of Nubank was rolled out in July last year. Initially, it only allowed buying and selling crypto using Brazilian reais. Withdrawing or depositing crypto is not permitted upon launch.
Fast-forward to this year, the bank also included in its listing Polygon (MATIC) and Uniswap (UNI) on its app. It remains bullish on the state of cryptos going forward, and it’s planning on launching its own coin soon.
Nubank is now worth $45 billion, and it is now the second-biggest virtual bank worldwide in terms of valuation. With 65 million users, the bank is looking for a major expansion abroad soon.
Nubank’s acquisition of Bitcoin certainly came at an opportune time when the market was at its low. Now that cryptos are projected to be at their bullish run, its investment may finally pay off.
Although it is yet to make a major pay-off from its crypto venture, the income of the bank has experienced a massive surge in its fourth-quarter earnings for 2022. This was due to increasing customer demand for its core lending products.
For the underlying question as to whether or not Buffet owns Bitcoin, the answer is a bit of a blur. Although he doesn’t directly own them and he continues his tirade towards crypto at every chance he gets, his huge stake at Nubank gives him exposure and provides him somewhat of a slice in the 1% BTC acquisition of the digital bank.
Giancarlo is an economist and researcher by profession. Prior to his addition to Blockzeit’s dynamic team, he was handling several crypto projects for both the government and private sectors as a Project Manager of a consultancy firm.