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Despite Warren Buffett’s warnings that Bitcoin is “rat poison”, Berkshire Hathaway continues to profit from cryptocurrencies
Although many major asset managers and investors are investing in, or at least open to, cryptocurrencies and Bitcoin, some remain reluctant to adopt the asset. The most prominent among the anti-Bitcoin is the legendary investor Warren Buffett.
Buffett’s strategy of investing in solid companies that continually generate cash and value has been extremely successful. This has allowed his company Berkshire Hathaway Inc. to sustain itself through the ups and downs of the market.
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Buffett is known for his anti-Bitcoin stance, stating in a 2018 interview with Yahoo! Finance: “If you buy something like Bitcoin or some cryptocurrency, you really have nothing that has produced anything. You just hope the next one pays more.”
At Berkshire’s 2022 shareholder meeting, Buffett explained his position on Bitcoin said“If you told me you had all the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back one way or another or another. It won’t do any good.”
Buffett is against Bitcoin and cryptocurrencies in general. However, this position does not entirely translate into his company’s investments. Berkshire Hathaway invested heavily in Brazilian fintech Nu Holdings Ltd. The investment performed best in 2023.
Founded in 2013, Nu initially offered low-cost bank accounts and personal loans through a much more digitalized format than its competitors. In 2022, the company launched Nucripto, which allows users to buy and sell more than 15 tokens.
Although the cryptocurrency business represents a rather small portion of its revenue, it still operates in the cryptocurrency sphere and its customer base continues to grow. He also launched his own cryptocurrency called Nucoin.
Buffett had invested $500 million in Nu Holdings through a Series G funding round before the company went public in December 2021. A few months later, Buffett increased his stake by another $250 million, resulting in a total investment of 750 million dollars.
The investment has paid off. Nu has grown nearly 50% in 2024 alone and recently hit all-time highs. This also comes off a strong 2023, in which the stock is up nearly 100%.
These huge gains could shift Buffett’s focus towards cryptocurrencies. Seeing profits earned from a cryptocurrency-related business might make the investor reconsider his strategy and stance towards cryptocurrencies. Bitcoin has outperformed most major indexes so far in 2024. The token is up nearly 70% in 2024, well above the S&P 500, which is up just over 10% in 2024.
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With Bitcoin and cryptocurrencies back in the spotlight, many eyes are on Berkshire Hathaway and Buffett as they weigh whether to continue investing in Bitcoin-adjacent assets or even the tokens themselves
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This article Despite Warren Buffett’s warnings that Bitcoin is “rat poison”, Berkshire Hathaway continues to profit from cryptocurrencies originally appeared on Benzinga.com
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