Warren Buffett, a well-known opponent of cryptocurrencies, made an attractive investment of $1.5 billion in Nubank, a Latin American financial organization with exposure to cryptocurrency. However, Nubank’s performance has lagged behind Coinbase’s and Bitcoin’s growth, and as a result, some have questioned Buffett’s investment approach.
Was Warren Buffett Wrong About Bitcoin?
Since the beginning of the year, Bitcoin’s value has increased by around 55%, and Coinbase’s stock price has risen by over 100%. Warren Buffett-backed Nubank, on the other hand, has only seen a 26% increase this year. According to Berkshire’s annual report, despite Nubank’s poor performance, Buffett has not sold any shares.
Notably, Nubank has performed better than Coinbase over the past year, with Coinbase down 61.76% as of March 17. Although the 38% annual decrease in Nubank is considerable, the 37% yearly loss in Bitcoin is practically identical. This may help to understand why Buffett decided to keep investing in Nubank despite the challenging market circumstances.
Does Bitcoin Still Provide a Higher Return Than Stocks?
Upon analyzing the performance of Bitcoin, Coinbase, and Nubank, one can observe that Bitcoin has consistently outperformed traditional stocks and stocks with crypto exposure. Since its launch in December 2021, Nubank’s stock price has decreased by over 50%, whereas Bitcoin’s decline over the same period has been limited to 44%.
In comparison, Cathie Wood, the CEO and founder of Ark Invest has made significant investments in Coinbase stock and more profitable assets in the cryptocurrency market than veteran investor Warren Buffett.
Bitcoin’s (BTC) value is currently $26,051, showing a bullish trend with a 5.69% growth over the previous 24 hours. In contrast, Nubank, which Warren Buffett supports, is up 3.83% on the day and trading at $4.61. Coinbase stock is doing well in the meantime; as of the time of writing, it has a current market value of $67.78, a rise of 5.13%.
Final Thoughts
Years of discussion have surrounded Buffett’s investment technique, with some complimenting his focus on the long term and others criticizing his lack of interest in advancing technologies. Buffett’s investment in Nubank, which has cryptocurrency exposure, is a move toward embracing new technologies. Yet, others have questioned if Buffett made a disastrous bet due to Nubank’s underperformance compared to Bitcoin and Coinbase.
Whether Buffett’s decision to keep his stake in Nubank will pay off in the long run, depends on how the market develops over the upcoming months. Nonetheless, the success of Bitcoin and Coinbase shows that cryptocurrencies have the potential to be a successful form of investing.
She is a freelance writer specializing in cryptocurrency news with a strong background in finance and a passion for technology. With several years of experience covering the latest trends and analysis in the rapidly evolving crypto market, she is dedicated to providing accurate and insightful coverage of the industry. Their goal is to help readers stay informed and up-to-date on the latest developments in the world of cryptocurrency.
