Can't Buffett resist the temptation of encryption? Berkshire quietly invests in Brazilian Digital Bank

Source: Cailian Press

Warren Buffett, the stock god, has always been cautious about cryptocurrency. At the 2018 Berkshire Hathaway shareholders meeting, Buffett once called Bitcoin a “new version of rat poison.”

However, the rapid appreciation of Bitcoin and other tokens in the past two years may have shattered the stock god’s stereotypical impression. According to documents, Berkshire Hathaway has long invested in Nu Holdings, a Brazilian digital bank linked to cryptocurrency, and made a fortune.

Nu has its own crypto platform Nubank Cripto, which initially supported tokens such as Bitcoin and Ethereum. At the end of last year, the platform integrated Uniswap and Chainlink, further expanding its business scope, allowing users to send, receive, and convert cryptocurrencies.

According to Nu, Berkshire Hathaway initially invested $500 million in its G-round financing in 2021, and subsequently injected another $250 million.

According to documents released by the U.S. Securities and Exchange Commission, Berkshire Hathaway’s stake in Nu increased from 0.1% in the fourth quarter of 2022 to 0.4% in the third quarter of 2024, worth nearly $1.2 billion.

Caution is paramount

In 2018, Buffett confidently stated that he kept hitting walls in areas he thought he understood, and therefore he was even less willing to blindly act in unfamiliar fields. He also stated that Berkshire Hathaway would not hold any cryptocurrencies or short any cryptocurrencies, and the company would never have a position in them.

However, this promise has loosened. As of Wednesday noon, Nu’s stock price has risen by nearly 34% year-on-year, which represents a considerable profit for Berkshire from a company that the stock god claims not to understand.

Interestingly, from the results, Berkshire Hathaway’s investment in Nu appears to be a successful transaction, but in the process, Berkshire’s decision-making does not seem confident. The third-quarter report for 2024 showed that Berkshire reduced its holdings of Nu for the first time in that quarter, while Nu’s stock price was experiencing intense fluctuations at that time.

To some extent, Berkshire Hathaway’s attempts in the cryptocurrency industry are very cautious, but this also matches Berkshire Hathaway’s overall investment policy.

By the end of 2024, Berkshire Hathaway held over $325 billion in cash and equivalents, but most of it is in U.S. Treasury bonds, which means that even the stock god will not heavily invest in popular stocks despite consecutive wins in the U.S. stock market.

Meyer Shields, managing director of boutique investment bank Keefe, Bruyette & Woods, said that Berkshire Hathaway has achieved success in this dull way for decades.