Buffett can't resist the temptation of crypto? Berkshire Hathaway quietly invests in Brazilian digital bank

Source: Cailian Press

The stock god Buffett has always been cautious about cryptocurrencies. At the 2018 Berkshire Hathaway shareholders meeting, Buffett once said that Bitcoin might be "an upgraded version of rat poison."

However, the rapid appreciation of Bitcoin and other tokens in the past two years may have broken this stereotype of the stock god. According to documents, Berkshire Hathaway has already invested in Nu Holdings, a digital bank in Brazil linked to cryptocurrencies, 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 and allowing users to send, receive and convert cryptocurrencies.

According to Nu, Berkshire Hathaway first invested in it in the G round of financing in 2021, with an investment of US$500 million at the time, and then injected another US$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.

Be cautious

In 2018, Buffett said that he was still constantly hitting a wall in things he thought he knew, so he was even more reluctant to act blindly in areas he didn't understand. He also said at the time that Berkshire Hathaway would not hold any cryptocurrencies, nor would it short any cryptocurrencies, and the company would never hold a position in them.

However, this vow has been loosened. As of noon on Wednesday, Nu's stock price rose nearly 34% year-on-year, which means that Berkshire has made a lot of money from this company that the stock god claims not to understand.

Interestingly, judging from the results, Berkshire Hathaway's investment in Nu was a successful deal, but in the process, Berkshire's decision did not look confident. The third-quarter financial report of 2024 showed that Berkshire reduced its holdings of Nu shares for the first time in that quarter, when Nu's stock price was experiencing violent fluctuations.

To some extent, Berkshire Hathaway's attempt in the encryption industry is very cautious, but this also matches Berkshire Hathaway's overall investment policy.

As of the end of 2024, Berkshire Hathaway held more than $325 billion in cash and equivalents, but most of them were U.S. Treasuries, which means that even when the U.S. stock market is on a winning streak, the stock god will not invest heavily in hot stocks.

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