Compass Investments

– How Warren Buffett is turning cryptocurrencies into profits.

Berkshire.

Warren Buffett is making money from bitcoin and cryptocurrencies through Nu Holdings.

Warren Buffett is skeptical of bitcoin, but Berkshire Hathaway is profiting from his investment in Nu Holdings.

Nu Holdings has grown significantly in value since Berkshire’s initial investment thanks to the impact of cryptocurrencies.

Buffett’s critical view of cryptocurrencies contrasts with his company’s profitable investments and illustrates his nuanced approach to cryptocurrencies.

Warren Buffett criticizes bitcoin and cryptocurrencies, but indirectly benefits from an asset class he has often rejected.

Despite his well-known skepticism, Buffett’s investment conglomerate, Berkshire Hathaway, has benefited significantly from shares of companies operating in the cryptocurrency market.

Buffett-led Berkshire Hathaway has long embraced the idea of investing in companies with strong cash flows and robust business models. This approach has helped the company weather market volatility with surprising resilience.

Nevertheless, Buffett continues to have a distaste for bitcoin and cryptocurrencies. In a 2018 interview, he famously stated that cryptocurrencies essentially create nothing and their value depends solely on whether the next person is willing to pay a higher price.

If you had all the bitcoins in the world and you offered me $25 for them, I wouldn’t take them. Because what would I do with them? You wouldn’t do anything with them,” Buffett said.

However, Berkshire Hathaway’s investment strategy shows a nuanced approach to the cryptocurrency market. The company has invested heavily in Nu Holdings. This is a Brazilian fintech company that launched the cryptocurrency trading platform Nucripto in 2022.

Despite Buffett’s personal stance, the company’s entry into the cryptocurrency market shows that it recognizes the potential profitability of the sector.

Nu Holdings is one of the most successful companies in Berkshire Hathaway’s portfolio: since an initial investment of $500 million in 2021, followed by another $250 million, the company’s value has skyrocketed, with its share price jumping nearly 50% in 2024 alone. This performance follows an astonishing jump in 2023, when the share price rose nearly 100%.

This strategic investment reflects the potential for change in the market: even traditional investors recognize the growing influence of digital currencies, and bitcoin’s astounding performance relative to the major indices in 2024 has Buffett even more intrigued about his future investment strategy.

While Buffett’s personal attitude toward bitcoin and cryptocurrencies has not changed, the economic success of cryptocurrency-related companies in Berkshire Hathaway’s portfolio may cause him to reconsider his stance.