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Berkshire Hathaway Profits From Cryptocurrencies Despite Warren Buffet’s Stance of Not Buying Even ‘If Everything Was Offered to Me for $25’
Berkshire Hathaway Profits From Cryptocurrencies Despite Warren Buffet’s Stance of Not Buying Even ‘If Everything Was Offered to Me for $25’
Although longtime Bitcoin skeptic Warren Buffett maintains his critical view of cryptocurrencies, Berkshire Hathaway Inc. (NYSE:BRK) continues to benefit financially from its investment in Brazilian fintech Nu Holdings Ltd. (NYSE:NAKED).
Although Buffett has been openly critical of BitcoinCalling it “rat poison,” Berkshire Hathaway has reaped significant gains from its stake in Nu Holdings. After initially investing $500 million in a Series G funding round and then another $250 million later, Berkshire’s involvement has paid off.
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In a 2018 interview with Yahoo Finance, the value of Bitcoin was called into question when Buffett said, “If you told me you had all the Bitcoin in the world and you offered me $25 for it, I wouldn’t take it, because what would I do with it? I’d have to sell it back to you somehow. It wouldn’t do any good.” He believes that Bitcoin is under-produced and is dependent solely on future price increases.
Nu Holdings, founded in 2013, launched the Nucripto platform in 2022, allowing users to trade over 15 tokens. The company’s performance has been impressive, with the market expected to rise 100% in 2023 and another 50% in early 2024.
This investment success has put Buffett in a tricky position, as Nu Holdings’ performance, up nearly 125% this year, stands in stark contrast to his negative stance on Bitcoin. Meanwhile, Bitcoin itself is having a breakout year in 2024, significantly outperforming indices like the S&P 500.
Understanding the broader context surrounding Berkshire Hathaway’s involvement in Nu Holdings can help gauge the significance of this development. Warren Buffett’s strong objections to Bitcoin go back several years. He has consistently dismissed it as a non-productive asset with no intrinsic value.
Buffett’s indirect exposure to cryptocurrencies through Nu Holdings highlights a nuanced shift in investment strategies. As noted earlier this year, Berkshire’s increased exposure to companies that are interested in cryptocurrencies may reflect a buoyant market.
In early 2023, reports emerged of a surge in global adoption of fintech. This trend underscores why Berkshire remains committed to fintech investments despite Buffett’s personal doubts (see Fintech Adoption On The Rise).
Buffett’s portfolio management has always focused on long-term profitability rather than short-term market trends. This strategy could explain why Berkshire continues to support Nu Holdings despite Buffett’s well-known views on Bitcoin.
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The broader implication is that even the most vocal critics like Buffett can find lucrative opportunities in the growing digital asset ecosystem, signifying an important aspect of financial diversification and adaptation.
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This item Berkshire Hathaway Profits From Cryptocurrencies Despite Warren Buffet’s Stance of Not Buying Even ‘If Everything Was Offered to Me for $25’ originally appeared on Benzinga.com
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