Buffett had previously referred to Bitcoin as "rat poison," yet his company has now made a big bet on the crypto market by investing $1.2 billion.
Original Title: Warren Buffett's Berkshire Hathaway takes a sip of the crypto 'rat poison' he once said he would never go near
Original Source: fortune
Original Translation: Ted Wu
Warren Buffett has always made it clear that he dislikes cryptocurrency. However, Berkshire Hathaway has invested hundreds of millions of dollars in a Brazilian bank related to cryptocurrency — Nu Holdings Ltd., whose stock has seen a 34% annual gain.
Berkshire Hathaway's CEO and Chairman Warren Buffett has repeatedly expressed his stance on cryptocurrency: he doesn't like it.
During Berkshire Hathaway's 2018 annual meeting, Buffett referred to Bitcoin as "probably rat poison squared."
"With respect to cryptocurrency, I can say almost with certainty that they will come to a bad ending," Buffett stated in a 2018 CNBC interview. "We don't own any cryptocurrency, we never will, and we will never short it either."
However, recent reports indicate that Berkshire Hathaway and some of its investment managers may have become more lenient in their views on cryptocurrency.
Berkshire Hathaway has invested in Nu Holdings, a Brazilian digital bank company that has its cryptocurrency platform and supports the cryptocurrency market. According to information from Nu Company, Berkshire Hathaway initially participated in a $500 million Series G funding round in 2021, followed by an additional investment of $2.5 billion.
In 2022, Nu launched its cryptocurrency platform — Nubank Cripto, initially supporting Bitcoin, Ethereum, and Polygon. The platform now includes Uniswap and Chainlink, allowing users to send, receive, and exchange cryptocurrency.
Nu Holdings did not immediately respond to Fortune's request for comment.
According to a filing from the U.S. Securities and Exchange Commission (SEC), Berkshire Hathaway increased its stake in Nu from 0.1% at the end of the fourth quarter of 2022 to 0.4% by the third quarter of the 2024 fiscal year.
Berkshire Hathaway and representatives of Buffett did not immediately respond to a comment request from Fortune magazine.
This means that by the end of the third quarter of the 2024 fiscal year, Berkshire Hathaway held over 86 million shares of Nu stock, valued at nearly $1.2 billion. Thus, Buffett and Berkshire Hathaway are benefiting from a business he previously claimed not to understand.
“I’ve had a lot of trouble with things that I thought I understood, so why in the world should I take a long or short position in something I don’t know anything about?” Buffett said in a 2018 CNBC interview.
As of noon on Wednesday, Nu Holdings' stock price had risen nearly 34% year-to-year. And now, Berkshire Hathaway appears to be making investments related to cryptocurrency, with Buffett possibly needing to rephrase his previous comments that cryptocurrency would not have an impact.
“If you gave me all the Bitcoin in the world and it was selling for $25, I’m not going to take it because I don’t know what in the world it will do for me,” Buffett said at the 2022 Berkshire Hathaway shareholder meeting. “I’ve got to sell it to you, no matter what. It won’t do anything.”
Nevertheless, it is worth noting that Berkshire Hathaway is generally more conservative in its investment strategy. According to the company's financial statements 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 avoids heavy investment in popular stocks even as the market continues to perform well.
“The reason Berkshire has been successful over these years is because it has remained boring at this point,” said Maya Schultz, Managing Director at the boutique investment bank Keefe, Bruyette & Woods, in an interview with Fortune’s Alanna Botros in November 2024.
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