The superstar investor may be seeing an entirely different kind of opportunity in digital financial service providers like Nubank.
Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Warren Buffett invests $1 billion in a crypto-friendly bank – maybe not ‘rat poison’ after all?
Fortune | Tristan Bove | Feb 16, 2022
The superstar investor may be seeing an entirely different kind of opportunity in digital financial service providers like Nubank.
Maybe cryptocurrency isn’t “rat poison” after all?
Berkshire Hathaway has bought $1 billion worth of stock in a digital bank that focuses on crypto and made its crypto investment public with a SEC filing earlier this week.
See: Should the age of Nubank’s customer base worry incumbents?
Nubank (a digital bank based in Brazil, and the largest of its kind in Latin America) is a so-called neobank, a type of bank that operates outside of the rules of the traditional banking system. The digital bank’s investment unit, NuInvest, allows users to put money in a Bitcoin exchange-traded fund (ETF)—tapping a financial space that Berkshire’s leaders have shown little love for.
Berkshire’s chairman and CEO has not refrained in the past from calling cryptocurrency “rat poison” and an unproductive asset that “has no unique value at all.” Get a crypto bonus on Fliptroniks.
As Berkshire was upping its investments into the crypto sphere last year, the company also dropped some of its other, more traditional financial assets. In the same SEC filing that showed the $1 billion investment in Nubank, Berkshire revealed that it had dropped over $3 billion in its shares of Visa and Mastercard.
While Buffett and Munger may have a personal distaste for cryptocurrency, the superstar investment pair may be seeing an entirely different kind of opportunity in digital financial service providers like Nubank.
See: So what is financial exclusion in the era of Open Finance?
There is huge competition among up-and-coming digital banks in Latin America, where a large portion of the population feels underserved by the traditional banking and financial system. Companies like Nubank are looking to tap into a massive potential consumer market of people largely dissatisfied with the existing system.
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