By
Tolu Ajiboye
April 8th, 2024
The recent Berkshire purchase of Nubank stock suggests that Warren Buffett may be more accommodating towards digital assets.
Berkshire Hathaway recently increased its exposure in Brazil’s largest fintech platform Nubank, with a $1 billion investment. A filing with the securities and exchange commission on February 14th, revealed that Berkshire’s billion-dollar purchase in the fourth quarter of 2021 were Nubank Class A stocks. Meanwhile, the multinational industrial conglomerate also offloaded $1.8 billion and $1.3 billion worth of Visa (NYSE: V) and Mastercard (NYSE: MA) stocks, respectively. This move might be Berkshire’s attempt to gain growing exposure to fintech companies.
Besides being the largest fintech bank in Latin America, Nubank is also popular among Bitcoin investors in the region. Berkshire’s purchase of Nubank’s shares could also indicate that the former’s founder Warren Buffett may be gradually warming up to digital currencies. The widely described “Oracle of Omaha” had previously understated emerging DeFi solutions such as Bitcoin (BTC), describing it as an asset that “does not create anything”.
Berkshire Hathaway Also Earlier Invested in Nubank Last Year
In mid-2021, Nubank received a $500 million investment from Berkshire, intending to use it for international expansion. Following Nubank’s debut on the New York Stock Exchange (NYSE) in December of that same year, Berkshire made a $150 million investment return.
Buffett now has more companies in his portfolio that have direct or indirect exposure to BTC and other digital currencies. So far, the billionaire investor has not shown any inclination to sell his position in Nubank. This perceived willingness by Buffett to associate with crypto-involved may point to strides in the fintech and DeFi spaces. Greg Waisman, co-founder, and chief operating officer of crypto wallet service Mercuryo commented on Buffett’s softened crypto stance:
“The Nubank investment can be tagged as Buffett’s way of supporting the fintech/crypto world without taking back his criticisms of the past”.
Currently, Buffett has no direct investments in BTC. However, Waisman says the recent development suggests that Berkshire founder is now indirectly backing the crypto ecosystem.
How Berkshire Could Gain from This Association from a Crypto-focused Perspective
Nubank acquired trading platform called Easynvest in September 2020. Since 2021, Nuback has offered a BTC ETF dubbed QBTC11. The ETF has the backing of QR Asset Management, and lists on the B3 stock exchange – the second-oldest in Brazil. These developments make it plausible that Nubank’s crypto exposure via Easynvest could benefit Berkshire through additional revenue opportunities.
According to Bloomberg Intelligence data, Crypto investment products grew exponentially last year, more than doubling in number from 35 to 80. In addition, the total valuations of assets held by these investment vehicles hit $63 billion. The recorded figure is much higher than the $24 billion seen at the start of 2021.
Bank of New York Mellon Corp’s Emily Portney – another company Buffett invested in – touched on this trend. According to the CFO, digital assets could become a “meaningful source of revenue” for investment banking companies. This is particularly so as BTC investment vehicles become more mainstream.