Warren Buffett’s crypto U-turn?

Warren Buffett, long one of cryptocurrency’s most vocal critics, has surprised the financial world with his company’s significant investment in a crypto-linked enterprise. Berkshire Hathaway has quietly amassed over $1.2 billion in shares of Nu Holdings Ltd., a Brazilian digital bank with a thriving cryptocurrency platform.

Buffett has famously dismissed cryptocurrencies as “rat poison squared” and predicted their downfall during Berkshire Hathaway’s 2018 shareholder meeting. Yet his firm’s growing stake in Nu Holdings suggests a more nuanced reality.

Berkshire Hathaway first invested $500 million in Nu Holdings during a 2021 funding round, followed by another $250 million. This strategic interest has since grown, with the firm holding over 86 million shares by late 2024—an increase from 0.1% to 0.4% ownership within two years.

Nu Holdings, known for its innovative approach to digital banking, launched its cryptocurrency platform, Nubank Cripto, in 2022. Initially supporting Bitcoin, Ethereum, and Polygon, the platform has expanded to include Uniswap and Chainlink. It allows users to send, receive, and convert cryptocurrencies, making it a key player in the Latin American crypto ecosystem.

A change in tone or tactics?

Buffett’s personal skepticism toward crypto remains well-documented. In a 2018 CNBC interview, he dismissed the idea of owning or shorting cryptocurrencies, citing his lack of understanding and their speculative nature. Even as recently as 2022, he quipped that he wouldn’t take all the Bitcoin in the world for $25.

However, the investment in Nu Holdings raises questions about whether this stance is softening—or if Berkshire Hathaway sees value in the infrastructure surrounding crypto rather than the assets themselves.

A conservative portfolio with a modern twist

Despite this foray into a crypto-linked business, Berkshire Hathaway’s broader investment strategy remains cautious. As of late 2024, the company held more than $325 billion in cash, with most of it parked in US Treasury bills. This conservative approach has long been a hallmark of the firm’s success.

Yet the 34% year-over-year rise in Nu Holdings’ stock demonstrates the profitability of its digital banking and crypto offerings, potentially marking a rare intersection of Buffett’s traditionalist investing ethos with emerging financial technology.

While Berkshire Hathaway and Buffett have declined to comment on the matter, one thing is clear: the world’s most famous crypto skeptic may now be benefiting from the industry he once dismissed. Whether this signals a deeper shift or a calculated exception, it’s a twist few could have predicted.