Dumping Visa and Mastercard Stocks, Buffett Buys $1 Billion Nubank Bets on New Crypto Power

Warren Buffett seems to believe that Nubank is the next big potential fintech stock.

Buffett's Berkshire Hathaway bought $1 billion worth of Nubank Class A shares in the fourth quarter of 2021, while dumping $1.8 billion, according to a regulatory filing disclosed on Feb. 14. $1.3 billion in Visa and Mastercard stock.

Dumping Visa and Mastercard Stocks, Buffett Buys $1 Billion Nubank Bets on New Crypto Power

As previously reported by the media, Nubank is the largest fintech bank in Brazil and will be listed on the New York Stock Exchange (ticker: NU) and Brazil’s B3 exchange (ticker: NUBR33) on December 9, 2021. Nubank's shares rose nearly 15% to close at $10.33 on the New York Stock Exchange's first closing day, valuing it at $45 billion, making it the most valuable listed bank in Latin America. Nubank-owned trading platform Easynvest has been actively offering a Bitcoin exchange-traded fund (ETF) called QBTC11, which is backed by QR Asset Management and listed on the B3 stock exchange, since June 2021.

Berkshire Hathaway invested $500 million in Nubank in July 2021, with a return on its investment of $150 million by December 2021. So far, Buffett has not shown any intention to sell his Nubank position.

Crypto-friendly companies in Buffett's portfolio

While Mr. Barr once described bitcoin as "rat poison squared," Buffett has an indirect exposure to crypto as some of the companies in his portfolio venture into the cryptocurrency space.

Bank of America, the second largest U.S. bank: In July 2021, Bank of America approved trading Bitcoin futures for some clients. In an October 2021 announcement, Bank of America launched a cryptocurrency research initiative, citing “growing institutional interest.”

US Bancorp, the fifth largest bank in the United States: In October 2021, a month before Bitcoin reached an all-time high of $69,000, US Bancorp launched a crypto custody service for its institutional investment managers.

Bank of New York Mellon (BNY Mellon), a veteran U.S. bank: In November 2021, the Bank of New York Mellon Digital Assets Department was established, dedicated to building the first multi-asset custody and management platform for traditional and digital assets. Emily Portney, chief financial officer at Bank of New York Mellon, said digital assets could become an “important source of revenue” for investment banks as bitcoin investment vehicles become more mainstream.

Buffett is widely sought after for his prudent investment approach and is also called "The Oracle of Omaha" by industry insiders. His value investment in Nubank shows that he agrees that the trend in the fintech industry is the digitization of financial services. And willing to cooperate with companies involved in the cryptocurrency industry.

Greg Waisman, co-founder and COO of crypto wallet service Mercuryo commented: “The investment in Nubank can be flagged as Buffett’s way of supporting the fintech/crypto world, and even indirect exposure is bound to increase positive sentiment in the market, potentially driving more Many investors have entered the field."

Nubank shares got a boost on the news of the investment. Nubank was up more than 5 percent on the day as of Tuesday's close, closing at $9.15, market data showed. (comparative push)