Is Warren Buffett Now Investing in Bitcoin? What Do You Know That We Don't?

Originally Posted: Publish0x

Let me first put them in context. Warren Buffett, also known by the nickname "Oracle of Omaha", for those who don't know him, is considered one of the best investors of all time. He is called that because his investment decisions and opinions on the market are closely followed by the investment community, and because he lives and works in Omaha, Nebraska, United States. Buffett is the founder, president and main shareholder of Berkshire Hathaway, a company that owns stakes in various companies such as Apple, Coca-Cola, American Express, Bank of America, BNSF Railway and Geico. With a fortune estimated at more than $100 billion, he is known for his long-term investment philosophy, his pursuit of businesses with lasting competitive advantages, and his philanthropic generosity.

Buffett's investment philosophy is based on "VALUE INVESTING", which consists of investing in companies that are undervalued by the market, but that have superior intrinsic value and a lasting competitive advantage. This entrepreneur looks for companies that produce goods or services that do not change over time, that have good management, that generate constant profits and that reinvest in their growth. His investments are long-term, with the intention of holding his shares indefinitely or until he finds a better opportunity. He is known to avoid companies that he does not understand, that depend on technological innovation or that are subject to too much competition or regulation.

Buffett has been one of the biggest critics of bitcoin and cryptocurrencies in general, and although we can only speculate about his true intentions, some possible reasons can be inferred based on his statements and his investment philosophy:

📌 Consider that bitcoin has no intrinsic value, since it does not produce anything or generate income. For him, bitcoin is just an illusion based on the hope that someone will pay more for it in the future.

📌 He is a long-term investor who looks for solid, profitable companies with competitive advantages. Bitcoin, on the other hand, is a volatile, speculative asset and subject to competition from other cryptocurrencies.

📌 He is skeptical about technological innovations that he does not understand or that do not fit his business model. Bitcoin and blockchain are complex concepts that require technical knowledge and a disruptive vision.

📌 He has a conservative and ethical vision of finance, which clashes with the anonymous, decentralized and unregulated nature of bitcoin. Unfortunately, many people still maintain the false concept that bitcoin is associated with illicit activities, fraud and computer attacks.

However, his recent investment in a pro-crypto bank could indicate a change of heart or at least an openness to exploring the potential of this new technology. This is Nubank, the largest digital bank in Latin America, which offers cloud-based financial services and has more than 40 million clients in Brazil, Mexico and Colombia. This bank announced last June that it had received an investment of $500 million from Berkshire Hathaway, which raised its valuation to $30 billion.

A characteristic of Nubank is that it is also an ally of cryptocurrencies, allowing its users to buy and sell bitcoin and other cryptos through its platform Easynvest, a stock brokerage that it acquired in 2020. In addition, they have also expressed interest in offering custody and management services for digital assets in the future.

Does this mean that Buffett has become a bitcoiner? Probably not, since as I explained previously, the tycoon has reiterated on several occasions his rejection of bitcoin as an asset of value, going so far as to call it "rat poison squared" or "mirage." However, his commitment to Nubank could be a sign that he recognizes the disruptive potential of digital banking and financial innovation, and that he does not want to be left behind in this revolution.

It should be noted that Nubank is not the only pro-crypto bank that has caught Buffett's attention. In 2018, Berkshire Hathaway invested $600 million in two Brazilian fintechs: StoneCo and PagSeguro. Both companies offer digital payment solutions and have also incorporated cryptocurrencies into their services.

It is very likely, in my view, that these investments could be a way to diversify Buffett's portfolio, which is dominated by traditional companies such as Coca-Cola, Apple or Bank of America. They could also be a strategy to take advantage of the economic growth and technological adoption of Latin America, a region where cryptocurrencies have gained popularity as an alternative to the conventional financial system.

Be that as it may, the truth is that Buffett is indirectly benefiting from the rise of bitcoin and cryptocurrencies, although he does not recognize it. What is certain is that his opinion generates a lot of attention and debate in the world of cryptocurrencies. Maybe he will remain a detractor until the end or one day he will change his mind, he will join the bitcoiners club and even launch his own cryptocurrency 😀😀😀: can you imagine a BuffettCoin?

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Author's Note: The opinion expressed here is not investment advice, is provided for informational purposes only, and reflects the opinion of the author only. I do not promote, endorse or recommend any particular investment. Investments may not be right for everyone. Every investment in the market and every trade you make involves risk, so you should always do your own research before making any decision. I do not recommend investing money that you cannot afford to chair, as you could lose the entire amount invested.

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