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Bitcoin critic Warren Buffett invests $1 billion in neobank that provides crypto-related services

Nubank’s investment unit NuInvest allows investors to invest in crypto exchange traded funds (ETFs), according to the company website.

Bitcoin critic Warren Buffett invests $1 billion in neobank that provides crypto-related services
Warren Buffett, 91, bought $1 billion of Class A stock in the company in Q4 2021

The Oracle of Omaha Warren Buffett, who once called Bitcoin a rat poison squared and is considered one of the biggest belligerent critics of digital currencies, has invested $1 billion in Brazil-based neobank Nubank which provides crypto-related services. Warren Buffett, 91, bought $1 billion of Class A stock in the company in Q4 2021, showed a February 14 filing with the US Securities and Exchange Commission (SEC). Nubank’s investment unit NuInvest allows investors to invest in crypto exchange traded funds (ETFs), according to the company website.

“If you want to invest in crypto using ETFs and mutual funds, you can do so through stock exchanges such as NuInvest,” Nubank said on its website.

Founded in 2013, Nubank is reportedly the largest digital bank in the world with a customer base of 48.1 million as of September 30, 2021, and offers everything from a credit card to personal loans, life insurance, savings account, and more. In December 2021, the company was listed on the New York Stock Exchange and has a market cap of more than $40 billion currently. However, Warren Buffett had earlier also backed Nubank. The company had announced a $500 million investment from Buffett’s Berkshire Hathaway in June 2021. 

Also read: Ethereum finally breaks 9-week spell of outflows; sees $21 million inflows last week

The investments into Nubank assumed significance as Warren Buffett along with his long-time friend and business partner Charlie Munger had shown an aversion to cryptocurrencies. In 2019, Buffett had called bitcoin a ‘gambling device’. “There’s been a lot of frauds connected with it. There have been disappearances, so there’s a lot lost on it. Bitcoin hasn’t produced anything,” Buffett had told reporters ahead of Berkshire Hathaway’s annual meeting in 2019. He had also likened the cryptocurrency to the buttons on his jacket. “I’ll tear off a button here. What I’ll have here is a little token…I’ll offer it to you for $1000, and I’ll see if I can get the price up to $2000 by the end of the day… But the button has one use and it’s a very limited use.” 

Likewise, Munger, 98, on Wednesday at the annual meeting of the US-based publication Daily Journal called for banning bitcoin and ‘admired’ China for doing so. “I wish it had been banned immediately, and I admire the Chinese for banning it,” Munger said. In May last year during an interview at the annual shareholder meet of Daily Journal, he came down heavily on the growing enterprise value of Elon Musk’s electric vehicle company Tesla and Bitcoin price. Munger had said that he doesn’t know which is worse as he drew an analogy from the 18th century English writer Samuel Johnson’s quote on deciding ‘order of precedency’ between a flea and a louse.

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First published on: 17-02-2022 at 19:33 IST