Berkshire Hathaway spends $1.2 billion in the encryption market

Warren Buffett has always been clear about his dislike for Crypto Assets. However, Berkshire Hathaway has invested millions of dollars in a Brazilian bank related to Crypto Assets - Nu Holdings Ltd., whose stock has risen by 34% this year.

Attitude Change

Warren Buffett, CEO and Chairman of Berkshire Hathaway, has repeatedly expressed his dislike for Cryptocurrency.

At the 2018 Berkshire Hathaway annual meeting, Buffett referred to Bitcoin as ‘probably rat poison squared’.

“We do not hold any Crypto Assets, nor do we short any Crypto Assets, we will never hold them.”

“As far as Crypto Assets are concerned, I can almost certainly say that they will end in a bad way.” Buffett said in an interview with CNBC in 2018.

However, recent reports suggest that Berkshire Hathaway and some of its fund managers may be becoming more lenient in their views on Crypto Assets.

Berkshire Hathaway invested in Nu Holdings, which is a Brazilian digital bank company that has its own Crypto Assets platform and supports the Crypto Assets market.

According to the information from NU, Berkshire Hathaway initially participated in a Series G financing round of $500 million in 2021, followed by an investment of $250 million.

NU launches encryption platform

In 2022, Nu launched its Cryptocurrency platform - Nubank Cripto, initially supporting Bitcoin, Ethereum, and Polygon. The platform now includes Uniswap and Chainlink, and allows users to send, receive and exchange Cryptocurrency.

Nu Holdings did not immediately respond to Fortune magazine’s request for comment.

According to the Securities and Exchange Commission (SEC) filing, Berkshire Hathaway increased its stake in NU from 0.1% at the end of the fourth quarter of 2022 to 0.4% in the third quarter of the 2024 fiscal year.

Berkshire Hathaway and representatives of Warren Buffett did not immediately respond to Fortune magazine’s request for comment.

This means that as of the end of the third quarter of the 2024 fiscal year, Berkshire Hathaway held over 86 million shares of NU stock, worth nearly $1.2 billion. Therefore, Buffett and Berkshire Hathaway are benefiting from a business that he had previously claimed not to understand.

“I have caused a lot of trouble because of what I thought I understood,” Buffett said in a 2018 interview with CNBC. “So why would I go long or short on something I don’t understand at all?”

As of Wednesday noon, the stock price of Nu Holdings has increased by nearly 34% year-on-year.

Re-examine

And now, Berkshire Hathaway seems to be making investments related to Crypto Assets, and Buffett may need to rephrase his previous remarks that Crypto Assets will not have an impact.

“If you tell me that you own all the bitcoins in the world and offer to sell them to me for $25, I wouldn’t take it because what would I do with it?” Buffett said at the 2022 Berkshire Hathaway shareholder meeting. “I would have to sell it back to you, regardless. It doesn’t do anything.”

However, it should be noted that Berkshire Hathaway is generally conservative in its investment strategy.

According to the company’s financial report for the fourth quarter of 2024, Berkshire Hathaway holds over $325 billion in cash and equivalents, most of which are U.S. Treasury bonds. This means that Berkshire Hathaway has also avoided heavy investment in popular stocks in the market’s continuous excellent performance.

“The reason Berkshire Hathaway has been successful over the years is because it has consistently maintained a boring approach,” said Mayer Schels, Managing Director of boutique investment bank Keefe, Bruyette & Woods, in an interview with Fortune’s Alana Botros in November 2024.