News
Despite Warren Buffett’s Warnings Calling Bitcoin ‘Rat Poison,’ Berkshire Hathaway Continues to Profit from Crypto
Although many of the leading asset managers and investors are investing in, or at least opening up to, cryptocurrencies and Bitcoin, a few are still hesitant to embrace the asset. Most prominent in the anti-Bitcoin camp is legendary investor Warren Buffett.
Buffett’s strategy of investing in strong companies that continually generate cash and value has been enormously successful. This allowed his company Berkshire Hathaway Inc. to survive through the ups and downs of the market.
Don’t miss:
Buffett is known for his anti-Bitcoin stance, stating in a 2018 interview with Yahoo! Finance: “If you buy something like Bitcoin or a cryptocurrency, you don’t really have anything that produced anything. You just hope the next guy pays more.”
At Berkshire’s 2022 shareholder meeting, Buffett explained his position on Bitcoin saying“If you told me you own all the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it, because what would I do with it? I’d have to sell it back to you somehow another. or other. It won’t do anything.
Buffett is against Bitcoin and crypto in general. However, this position does not fully translate into his company’s investments. Berkshire Hathaway is heavily invested in Brazilian fintech Nu Holdings Ltd. The investment was its best performer in 2023.
Founded in 2013, Nu initially offered low-cost bank accounts and personal loans via a much more digitized format than its competitors. In 2022, the company launched Nucripto, which allows users to buy and sell more than 15 tokens.
Although its crypto business represents only a small portion of its revenue, it still operates in the crypto sphere and its customer base continues to grow. It also launched its own cryptocurrency called Nucoin.
Buffett had invested $500 million in Nu Holdings in a Series G funding round before the company went public in December 2021. A few months later, Buffett increased his stake by $250 million additional, bringing a total investment of $750 million.
The investment paid off. Nu is up nearly 50% in 2024 alone and has recently reached all-time highs. This also follows a strong 2023, in which the stock rose nearly 100%.
These huge gains could shift Buffett’s focus to crypto. Seeing the profits made on a crypto-related business could make the investor rethink their crypto strategy and stance. Bitcoin has outperformed most major indexes so far in 2024. The token is up almost 70% in 2024, well above the S&P 500, which is up just over 10% in 2024 .
The story continues
As Bitcoin and crypto return to the spotlight, many eyes are on Berkshire Hathaway and Buffett as they consider whether to continue investing in Bitcoin-adjacent businesses or even the tokens themselves.
Read next:
crypto digital assets
“ACTIVE INVESTORS’ SECRET WEAPON” Boost your stock market game with the #1 “news and everything else” trading tool: Benzinga Pro – Click here to start your 14-day trial now!
Get the latest stock analysis from Benzinga?
This item Despite Warren Buffett’s Warnings Calling Bitcoin ‘Rat Poison,’ Berkshire Hathaway Continues to Profit from Crypto originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.