Warren Buffett recently invested $1 billion in Nubank. He has, at the same time, dumped stocks of Visa and MasterCard. With these moves, his portfolio has directly or indirectly become more exposed to Embrace Bitcoin and other cryptocurrencies.
Berkshire Hathawaysold a part of its holdings in Mastercard and Visa and purchased more Nubank stocks. Nubank is Brazil’s largest fintech bankand is widely popular among Brazilian Bitcoin investors.
Berkshire Hathaway’s Latest Securities Filing
Warren Buffett’s multinational conglomerate holding companymade a securities filing last week that disclosed its acquisition of $1 billion worth of Nubank Class A stock. It sold $1.3 billion worth of Mastercard and $1.8 billion worth of Visa stocks. This is seen as a major shift away from credit firms and increased exposure to fintech entities.
Buffett is famous for his careful approach to investment, especiallyin fintech. While earlier, he had shown disinterest in decentralized finance solutions such as Bitcoin, the latest move indicates a major shift in his views. Could this mean that he may explore more crypto-related assets in the future?
Some of the relevantkey facts about Buffett’s recent move are as follows:
- Nubank is a crypto-friendly fintech bank. It is one of the most valuable banks in Latin America. The product portfolio it offers also includesa Bitcoin ETF.
- In 2018, Buffett made some critical comments on cryptocurrency. He has been one of the most prominent critics of Bitcoin until so far.
- Berkshire Hathaway purchased a stake of $500 million in Nu PagamentosSA in 2021. This is the parent company of Nubank. The neobankwent public in December 2021.
- Mastercard and Visa offer many crypto-based credit cards that continue to gain popularity.
- The news of Buffett investinginNubank and as tensions between Russia and Ukraine ease up, BTC recovered in the past 24 hours. The overall cryptocurrency market cap has again crossed the $2 trillion mark.
Bitcoin Making its Way into Buffett’s Portfolio
This investment shows Buffett’s acceptance of the digitization of financial services, something that powers the fintech sector. He also seems to be more willing than ever before to get involved with companies related to the crypto sector.
Consider the following facts:
- Easynvest is a trading platform that offers BTC ETF. Nubank currently owns this Bitcoin Trading Platform.
- Easynvest’sETF is referred to as QBTC11 and it is backed by QR Asset Management.
- QBTC11 is listed on Brazil’s B3 stock exchange.
Thus, Nubank is exposed to cryptocurrencies through Easynvest. Its performance can benefitits leading investor, no matter what his views of BTC are.The number of crypto-based products for the company doubled in 2021, increasing from 35 to 80. At the start of 2021, the assets were valued at $24 billion but crossed $63 billion at the end of the year.
According to the Bank of New York Mellon Corp.’s (BNY Mellon)CFO, Emily Portney, digital assets could emerge as a significant revenue sourcefor investment banking firms as BTC investment vehicles enter the mainstream. This bank is included in Buffett’s investment portfolio.
Why Buffett Cannot Avoid Exposure to Crypto?
Warren Buffett has maintained a reputation for not directly investingin Bitcoin. He is still gaining indirect exposure. Many companies in his portfolio have stakes in the cryptocurrency sector.
In October last year, right before BTC touched its peak of $69,000, the U.S. Bancorp announced its crypto custody services for institutionalinvestment managers. The fifth-largest bank in the U.S. recorded growth in demand from its fund services clients.
At the same time, the Bank of Americaannounced a crypto research initiative. The bank cited growth in institutional interest. It was only a few months earlier that BNY Mellon made an announcement about holding, transferring, and issuing BTC and other cryptos for its asset-management clients.
Many see Berkshire Hathaway’s Nubank investment as Buffett’s strategy of getting into the fintech or crypto world without addressing or going back on his original criticism of this market. He seems to be backing the crypto market indirectly.
While Buffett’s firm is making these changes in its portfolio, it will be worth the wait to check when he makes any public announcement about the viewpoints he held in the past.