Warren Buffett Invests $1 Billion Into Crypto Friendly Fintech Bank

February 15, 2022 5:45 pm

Warren Buffett’s Berkshire Hathaway reportedly just invested $1 billion into Nubank which is a crypto friendly bank which owns platforms that provide Bitcoin and crypto related ETFs.

At the same time, Berkshire Hathaway also reduced its investment in firms like Visa and Mastercard indicating a shift from more traditional financial firms to fintech companies that are more exposed to the emerging crypto industry.

To be precise, Buffett purchases $1 billion in Nubank stock while dumping a total of $3 billion worth of Mastercard and Visa stock combined.

The decision to gain so much exposure to the crypto market may mark a shift in the Buffet’s past negative perception of Bitcoin to something more positive.

CoinTelegraph reports:

Buffett, the so-called “Oracle of Omaha,” is popular for his cautious approach to investing, particularly in the market’s hottest sectors such as fintech.

The veteran investor had also downplayed emerging decentralized finance solutions like Bitcoin (BTC), ridiculing it as an asset that “does not create anything.”

But Berkshire’s new stake in Nubank shows that Buffett has been softening up to fintech lately. In detail, the firm had invested $500 million in the startup in July 2021.

Its returns on the said investment amounted to $150 million in December 2021 after Nubank debuted on the New York Stock Exchange (NYSE).

Buffett’s additional investment into Nubank shows his acknowledgment of the fintech sector’s underlying theme the digitization of financial services, as well as his willingness to associate with companies that are involved in the cryptocurrency sector.

The number of crypto related products on Nubank had grown tremendously in just the year 2021 alone as it went from 35 to 80 products.

In the year alone, the valuation of the assets had almost tripled as well growing from $24 billion to $63 billion which showed the emerging sector’s potential to generate profit for the firm.

Top financial executives such as Emily Portney (chief financial officer at Bank of New York Mellon Corp.) have also commented on the sector and acknowledged that digital assets are likely going to be widespread once companies realize the amount of revenue that they could provide for financial firms.

Although Buffet has expressed very strongly in the past that crypto had no value, it is clear that the tides are changing now that his investment portfolio is now full of companies that are directly involved with crypto.

Public.UK reports:

Whilst Buffett would possibly no longer spend money on Bitcoin at once, he’s already gaining oblique publicity as firms in his portfolio foray into the crypto sector.

In a similar fashion, in any other announcement made October 2021, Financial institution of The us introduced a cryptocurrency analysis initiative, bringing up “rising institutional hobby.”

Months earlier than, BNY Mellon introduced that it could dangle, switch, and factor Bitcoin and equivalent cryptocurrencies for its asset-management purchasers.

“The Nubank funding can also be tagged as Buffett’s means of supporting the fintech/crypto global with out taking again his criticisms of the previous,” asserted Greg Waisman, co-founder and COO of crypto pockets provider Mercuryo, including that the Berkshire boss is now backing the “virtual forex ecosystem not directly.”

As a result of Buffet’s recent actions, this has spurred much optimism among crypto investors as large institutional investors like Berkshire Hathaway accepting crypto exposure means a new milestone achieved by the emerging sector and may indicate that we may be in the middle of a digital revolution.

As always, its always a better bet to observe what they do rather than what they say.

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