As one of the world’s most prolific investors of all time, any comment that Warren Buffett makes related to the economy, stocks, or even cryptocurrency generates considerable attention˳
Regarding cryptocurrencies and Bitcoin (BTC 1˳77%) in particular, Buffett hasn’t shied away from criticizing the burgeoning asset class˳ On numerous occasions, Buffett has likened Bitcoin to the tulip mania that swept through the Netherlands roughly 400 years ago and is viewed as one of the first financial-asset bubbles˳
He repeatedly said he doesn’t own any Bitcoin and never will˳ But what if I told you that Warren Buffett actually owns some Bitcoin? The answer is a little complicated, but you might be surprised to discover that Buffett and his conglomerate company Berkshire Hathaway (BRK˳A 0˳83%) (BRK˳B 1˳21%) back a financial technology company that is keen on crypto and more specifically, Bitcoin˳
A Nu form of banking
The company is Nubank (NU -1˳04%), and it’s revolutionizing banking in Latin America˳ Nubank is based in Brazil but serves customers in Mexico and Colombia as well˳ The primary goal of Nubank is to provide banking to every income group, not just the wealthy, the traditional customer base for Latin American banks˳ It offers a variety of products that allow customers to spend, save, invest, borrow, and protect their money in new and innovative ways˳ And one of these new and innovative products revolves around crypto˳
In June 2022, Nubank launched its own crypto-trading platform which would allow its customers to buy and sell Bitcoin and Ethereum (ETH 1˳09%)˳ So far, the new product seems to be a hit as more than 1 million customers registered as users on the platform in less than one month˳ Nubank originally thought it would take at least a year before hitting those numbers˳
The decision to make a move into crypto was summed up best by Nubank’s Chief Executive Officer David Velez˳ In an interview, the CEO stated that “cryptocurrencies are a growing trend in Latin America” and that the determination to provide a crypto-based product was the result of a belief that cryptocurrencies possess “transformational potential in the region˳”
Buffett and Bitcoin
Now comes the interesting part˳ In an act of support, Nubank made the decision to allocate 1% of the cash on its balance sheet to Bitcoin˳ The company said the move was made to “strengthen the company’s conviction” in the potential of Bitcoin˳
As of June 30, Nubank had roughly $3˳1 billion in cash˳ With 1% allocated to Bitcoin, that would entail roughly $30 million in Bitcoin based on the most recent earnings report˳
Warren Buffett doesn’t directly own any Bitcoin˳ On more than one occasion, he’s made his voice heard on how he believes the cryptocurrency is worthless and holds no intrinsic value˳ But his 2˳3% stake in Nubank gives him indirect exposure to the asset˳
To have a little fun, we can calculate just how much Bitcoin Buffett is exposed to indirectly˳ With his 2˳3% stake in Nubank, that means Buffett “owns” somewhere around 27 bitcoins (worth about $570,00 at today’s prices) based on today’s prices˳
From trend to strategy
This is surely a broad assumption and only meant to speculate a bit, yet there is an angle here that is worth mentioning: Bitcoin continues to permeate the financial world˳ Naysayers like Buffet might be realizing that it is becoming increasingly difficult to protect their portfolios from gaining exposure to the asset class, even if that exposure is indirect˳
The trend of companies holding Bitcoin is a trend that only seems to be growing˳ Based on a handful of developments, like BlackRock (the world’s largest financial management corporation) offering Bitcoin to institutional investors, it’s plausible to assume that what is now just a trend could develop into a full-blown strategy embraced by companies to create a well-balanced portfolio˳
In preparation for that shift from trend to legitimate strategy, investors can follow what some of the world’s most innovative companies are doing – owning some Bitcoin˳