Warren Buffett Dumps Visa and Mastercard over Bitcoin-Friendly Bank

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on Feb 17, 2022
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  • Buffett's conglomerate has bought $1 billion worth of Nubank stock
  • Nubank is the biggest neobank in Latin America
  • He sold $1.8 billion to Visa and $1.3 billion to Mastercard in the same quarter

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Legendary investor and centibillionaire Warren Buffett doesn’t like cryptocurrencies such as Bitcoin and Ethereum. Still, Berkshire Hathaway, Buffett’s company, bought $1 billion of Nubank shares in the fourth quarter of 2021. By buying into this neobank, Buffett also indirectly exposed himself to bitcoin after all.

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Shift to fintech

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A report to the American stock watchdog SEC (Securities and Exchange Commission, ed.) last Monday shows that the investment vehicle has bought $1 billion worth of shares in the company. These are so-called class A shares. It also sold $1.8 billion to Visa and $1.3 billion to Mastercard in the same quarter. This seems to indicate a shift from credit card companies to fintech by Berkshire.

Buffett is known for avoiding investment hypes. The billionaire focusses primarily on the fundamentals of a company before investing a penny into it. Apparently, though, neobanks are starting to fit into this investment strategy. In July 2021, Berkshire also invested $500 million in Nubank.

Exposure to Bitcoin 

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It seems that Buffett is increasingly interested in digital financial services. This does not alter the fact that he remains critical of cryptocurrencies. In 2018, Buffett compared BTC to rat poison and called it “disgusting”. Since then, he has repeatedly emphasized that Bitcoin has “no value”. Nevertheless, with his investment in NuBank, Buffett is still exposed to the largest cryptocurrency on the market. 

1 billion dollar investment

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What’s striking about this is that Buffett simultaneously sold shares in the more traditional financial services companies; he sold $1.8 billion worth of shares in VISA and $1.3 billion worth of Mastercard shares.

Nubank

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Nubank is a Brazilian bank that mainly operates ‘digitally’, similar to Revolut and Monzo in the UK. It is the largest neobank in Latin America. As of writing, it has 38 million customers and was valued at $41.5 billion in December 2021.

The neobank acquired the trading platform Easynvest in 2020. That platform has been offering a Bitcoin ETF since June 2021. That creates extra income for the parent company NuBank, which Buffett benefits from.

Either way, crypto-tracking funds are on the rise. According to Bloomberg Intelligence data, that number has increased from 35 to 80 in 2021. The total valuation of the assets held by those funds stood at $63 billion last year, up from $24 billion at the start of 2021.

Other financial players in Berkshire Hathaway’s portfolio are also paying an increasing amount of attention to digital currencies. For example, institutional investors with U.S. Bancorp, one of the banks of which Buffett owns shares, has been investing in cryptocurrencies since last year. Bank of America, another bank in the billionaire’s portfolio, established a research division focused on cryptocurrencies in the fall of 2021.

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