Warren Buffett, despite his well-known skepticism towards cryptocurrencies, has seen significant profits from his investment in Nubank, a leading South American fintech firm offering a range of crypto services. These services include trading platforms for Bitcoin and Ethereum, a Bitcoin ETF product, and a Nubank loyalty token on the Polygon blockchain. The firm serves more than 1.35 million customers across Brazil, Colombia, and Mexico.
In 2021, Buffett's Berkshire Hathaway (NYSE:BRKa) invested $750 million in Nu Holdings, Nubank's parent company, acquiring 107 million shares. Since then, Nu's share price has surged by 106%, leading to an estimated $250 million in paper profits for Buffett. This investment represents about 0.1015% of Berkshire Hathaway's market capitalization of $767 billion as of November 2, 2023.
Buffett's stance on cryptocurrencies remains skeptical. In a May 2022 interview on CNBC's Squawk Box, he stated that cryptocurrencies "basically have no value and they don't produce anything." Despite this view, his profitable venture with Nu Holdings underscores the expanding influence and acceptance of fintech firms and cryptocurrencies within the global finance landscape.
Buffett's criticism of cryptocurrencies was highlighted when he declined to purchase Bitcoin even when offered all of it for $25 during the same CNBC interview. His investment in Nu Holdings, however, which is backed by Kevin O'Leary, has proven profitable. This reflects the changing dynamics within traditional finance and the rise of fintech firms and cryptocurrencies.
InvestingPro Insights
According to InvestingPro, the parent company of Nubank, Nu Holdings, has been showing promising growth. The company has a market cap of $40.22 billion and has shown a revenue growth of 109.89% over the last twelve months as of Q2 2023. The company's P/E ratio stands at a high of 508.81, indicating investor expectations of future earnings growth.
InvestingPro Tips suggests that the company has consistently increased earnings per share and net income is expected to grow this year. Furthermore, the company's stock is trading near its 52-week high, indicating strong investor confidence. However, the company's stock is in overbought territory according to the RSI, which could suggest a potential price correction in the near term.
InvestingPro offers additional insights and tips for Nu Holdings and other companies. For instance, there are 14 more InvestingPro Tips available for Nu Holdings, providing a comprehensive view of the company's financial health and performance.
These insights underscore the importance of detailed financial data and expert tips in making informed investment decisions.
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