Warren Buffett’s Berkshire Hathaway has divested some of its Visa and Mastercard holdings and increased its stake in Nubank, Brazil’s largest fintech bank, which is also popular with bitcoin investors in the country.
In late February, the industry group reported in a February 14 securities filing that it had purchased $1 billion of Class A shares from Nubank in the fourth quarter of 2021. On the other hand, it sold $1.8 billion from Visa and Mastercard and $1.3 billion. Stocks, suggesting a move away from credit companies to reach fintech competitors.
Known as the “Oracle of Omaha,” Buffett is known for his cautious approach to investing, especially in the more popular sectors of the market, such as fintech. The veteran investor also underestimated new decentralized financial solutions such as Bitcoin (BTC) and derided it as an asset that “creates nothing.”
But Berkshire’s new stake in Nubank shows that Buffett has softened toward fintech recently. In particular, in July 2021, the company invested $500 million in a startup. The return on this investment reached $150 million in December 2021 after Nubank debuted on the New York Stock Exchange (NYSE).
So far, Buffett has not shown any intention of selling his position at Nubank.
Buffett’s additional investment in Nubank demonstrates his appreciation for the fintech sector’s core theme of digitizing financial services, as well as his willingness to partner with companies in the crypto sector.
In particular, Easynvest, a trading platform acquired by Nubank in September 2020, has been actively offering a Bitcoin Exchange Traded Fund (ETF) since June 2021. The QBTC11 ETF is backed by QR Asset Management and listed on the B3 exchange. The second oldest stock exchange in Brazil.
As such, it appears that Nubank, which remains linked to the nascent crypto sector through Easynvest, may be pursuing spin-off opportunities to benefit its lead investor Warren Buffett, despite his views that bitcoin is “rat poison in the region.”
This is primarily due to the growth of investment products related to cryptocurrency in 2021. In particular, their number doubled in one year, increasing from 35 to 80, according to Bloomberg Intelligence, and the total value of the assets they used was $63. $1 billion versus $63 billion. $24 billion at the beginning of 2021.
Cash flow into cryptocurrencies doubled in 2021. Source: Bloomberg Intelligence.
Emily Portney, chief financial officer of Bank of New York Mellon Corp. — another company in Buffett’s investment portfolio — suggests that digital assets could become an “important source of income” for investment banking firms as Bitcoin investment vehicles become more popular.
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Meanwhile, Leah Wald, CEO of cryptocurrency director Valkyrie Investments, predicted an increase in capital flows associated with crypto-related investment vehicles and said it was a “phenomenon that is beginning to pick up” before commenting:
“If you look at the flow in terms of volume, you will not only see that it remains stable even with the price corrections that Bitcoin is notorious for, but you will see that many institutions are stepping in.”
Buffett’s wallet is full of crypto-loving companies
While Buffett cannot directly invest in bitcoin, he does receive indirect exposure when companies in his portfolio enter the crypto sector.
For example, in October 2021, just a month before bitcoin hit an all-time high of $69,000, the fifth largest US bank in the United States launched a crypto-assurance service for institutional investment managers, noting that they saw an increase in demand from Before that, “money”. customer service” in recent years.
Similarly, in another announcement in October 2021, Bank of America launched the Cryptocurrency Exploration Initiative, citing “rising institutional interest.”
A few months ago, BNY Mellon announced that it would store, convert and issue bitcoin and similar cryptocurrencies to its wealth management clients.
“Investing in Nubank can be seen as Buffett’s way of bolstering the fintech and cryptocurrency world without holding back from previous criticisms,” said Greg Wiseman, co-founder and CEO of cryptocurrency wallet service Mercuryo, adding that the Berkshire chief now supports it. Indirect digital currency system. ”
“Even indirect exposure is sure to boost positive sentiment, which could push more investors into the room.”