Buffett's Quiet Bet on Crypto: Unpacking Berkshire Hathaway's Investment in Nu Holdings

Buffett's Quiet Bet on Crypto: Unpacking Berkshire Hathaway's Investment in Nu HoldingsWarren Buffett, the renowned "Oracle of Omaha," is known for his conservative investment strategy and long-standing criticism of cryptocurrencies. However, recent reports reveal a surprising twist: Buffett's Berkshire Hathaway is indirectly profiting from the cryptocurrency market through its investment in Brazilian digital bank Nu Holdings

Buffett's Quiet Bet on Crypto: Unpacking Berkshire Hathaway's Investment in Nu Holdings

Warren Buffett, the renowned "Oracle of Omaha," is known for his conservative investment strategy and long-standing criticism of cryptocurrencies. However, recent reports reveal a surprising twist: Buffett's Berkshire Hathaway is indirectly profiting from the cryptocurrency market through its investment in Brazilian digital bank Nu Holdings. This fact stands in stark contrast to Buffett's public pronouncements against crypto, sparking speculation about his investment strategy and a potential shift in his attitude.

Berkshire Hathaway's investment in Nu Holdings began in 2021. The company participated in Nu Holdings' Series G funding round, initially investing $500 million and later adding another $250 million, for a total investment of $750 million. Nu Holdings is a rapidly growing fintech company in Brazil, offering services ranging from digital banking and credit services to a thriving cryptocurrency trading platform, Nubank Cripto. Initially supporting only major cryptocurrencies like Bitcoin, Ethereum, and Polygon, the platform has expanded to include decentralized finance (DeFi) protocol tokens such as Uniswap and Chainlink, allowing users to send, receive, and exchange cryptocurrencies.

Berkshire Hathaway's investment in Nu Holdings is not as straightforward as it seems. SEC filings show Berkshire Hathaway's stake in Nu Holdings steadily increasing, from 0.1% at the end of Q4 2022 to 0.4% in Q3 of fiscal year 2024. This translates to over 86 million shares of Nu Holdings, worth nearly $1.2 billion as of the end of Q3 FY2025. The investment has significantly appreciated, with Nu Holdings' stock price rising almost 34% year-over-year, generating substantial returns for Berkshire Hathaway.

This investment's success highlights the apparent contradiction between Buffett's actions and his outspoken criticism of cryptocurrencies. For years, Buffett has maintained a strongly negative stance on cryptocurrencies, including Bitcoin. His statements, now considered classic quotes in the crypto sphere, have repeatedly ignited market discussions.

A review of Buffett's history of criticizing cryptocurrencies reveals his consistent hardline position:

• 2013: "No plans to move into Bitcoin." This early statement reflected his caution towards this nascent technology.

• December 2014: "Bitcoin is a mirage." This characterized Bitcoin as illusory, suggesting a lack of inherent value and sustainability.

• October 2017: "Bitcoin is a bubble; it creates no value." This warned of Bitcoin's bubble-like risk, emphasizing its lack of intrinsic value.

• January 2018: "Cryptocurrencies will end badly." This pessimistic prediction reflected Buffett's long-term negative outlook on the cryptocurrency market.

• May 2018: "Bitcoin is rat poison. Cryptocurrencies will end badly." This metaphor powerfully expressed Buffett's aversion to cryptocurrencies and concerns about their future.

• February 2019: "Bitcoin is a delusion that attracts charlatans." This linked Bitcoin to fraudulent activities, highlighting its potential risks.

• May 2019: "Bitcoin is a gambling deviceBitcoin doesn't do anything. It just sits there. It's like seashells to me, not an investment." Buffett equated Bitcoin to a speculative tool with no practical use.

• 2020: Following a dinner with Justin Sun, Buffett maintained his negative stance on Bitcoin, stating his grandson preferred inheriting his dollar assets over Bitcoin.

• May 2022: "Wouldn't pay $25 for all the Bitcoin in the world." This extreme dismissal of Bitcoin's value further reinforced his negative view.

• April 2023: In a CNBC interview, Buffett labeled Bitcoin a "gambling token," pointing to its lack of intrinsic value.

• 2024: At Berkshire Hathaway's annual shareholder meeting, Buffett reiterated his opposition to Bitcoin, reaffirming its lack of value and status as a non-productive asset.

These statements represent Buffett's long-standing and unwavering criticism of cryptocurrencies. However, Berkshire Hathaway's investment in Nu Holdings presents a clear contrast to his public declarations. While Berkshire Hathaway doesn't directly invest in Bitcoin or other cryptocurrencies, indirect profits are derived from Nubank Cripto through its indirect ownership of Nu Holdings. This might suggest that Buffett's stance on cryptocurrency isn't immutable, or that Berkshire Hathaway's investment strategy is more flexible and diversified than its public statements indicate.

It's important to note that Berkshire Hathaway's investment strategy remains largely conservative. According to the company's quarterly financial reports, Berkshire Hathaway held over $325 billion in cash and equivalents at the end of 2024, mostly invested in low-risk assets like US Treasury bonds. This shows that despite the unexpected cryptocurrency-related gains from the Nu Holdings investment, its core strategy remains focused on robust, low-risk investments.

Whether Buffett will alter his public stance on cryptocurrencies due to the Nu Holdings investment remains an open question. However, the success of Berkshire Hathaway's investment in Nu Holdings undeniably offers a new perspective on the cryptocurrency market and adds complexity and intrigue to the legendary investor's strategy. This has prompted a reevaluation of Buffett's investment approach and further fueled discussions and speculation about the future of cryptocurrencies. Regardless of Buffett's ultimate assessment of cryptocurrencies, the Nu Holdings investment case will remain a significant subject for study and discussion in the financial world.