Crypto | Buffett | Munger: Why are Bitcoin critics Buffett & Munger investing in crypto-friendly companies?

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New Del­hi: War­ren Buf­fett’s Berk­shire Hath­away invest­ed $1 bil­lion in Nubank, a dig­i­tal lender, in the last quar­ter of 2021, accord­ing to a Secu­ri­ties and Exchange Com­mis­sion (SEC) filing.

The Brazil-based Nubank is a cryp­to-friend­ly play­er, whose invest­ment unit, NuIn­vest, allows users to invest in cryp­to exchange-trad­ed funds, accord­ing to the com­pa­ny website. 

This invest­ment move by Buf­fett, often called ‘Ora­cle of Oma­ha’, has bog­gled many cryp­to fanat­ics as the CEO of Berk­shire Hath­away has open­ly declared his dis­like for cryp­to-assets and called Bit­coins a ‘rat poi­son squared.’



Not only Buf­fett, his sec­ond in com­mand, Char­lie Munger, also called for a ban on cryp­tocur­ren­cies at the annu­al meet­ing of Dai­ly Jour­nal Corp. “I’m proud of the fact that I avoid­ed it. It’s like some vene­re­al dis­ease,” Munger said.

“I just regard it as beneath con­tempt. Some peo­ple think it’s moder­ni­ty, and they wel­come a cur­ren­cy that’s so use­ful in extor­tions and kid­nap­pings [and] tax eva­sion.” Munger, 98, is the vice-chair­man of Berk­shire Hathaway. 

“Buf­fett and Munger have crit­i­cized cryp­to at var­i­ous forums, but they are well aware of the tech­no­log­i­cal advance­ments and role of cryp­to in shap­ing finan­cial mar­kets,” said Alias­gar Mer­chant, Devel­op­er Rela­tions Engi­neer, Tendermint.

It is not sur­pris­ing that Buf­fett is mak­ing indi­rect invest­ments in cryp­to-friend­ly enti­ties as he might not like it but acknowl­edges its poten­tial, Mer­chant added.

Dur­ing the pre­vi­ous quar­ter, Berk­shire Hath­away dumped a por­tion of its Visa and Mas­ter­card holdings. 

Buf­fett is known for his ultra-cau­tious approach to invest­ing, par­tic­u­lar­ly in the mar­ket’s hottest sec­tors such as fin­tech, said Raj Kapoor, Advi­sor ‑Devel­op­ment & Strat­e­gy, Asgard Dao. 

“Buf­fett has ridiculed cryp­tocur­ren­cies as an asset that ‘does­n’t cre­ate any­thing’ but some­how he has been cosy­ing up to fin­tech late­ly. His moves reaf­firm his faith as well as his will­ing­ness to asso­ciate with com­pa­nies that are involved in the cryp­tocur­ren­cy sec­tor,” he added. 

Despite the out­right dis­taste for the new-age asset class, it is not the first time the Oma­ha based con­glom­er­ate, led by the super­star investor duo, has dab­bled in this market. 

They have made for­ays in the cryp­to sec­tor via their com­pa­nies in the port­fo­lio, observed Kapoor. 

The US-based NBFC Ban­corp launched a cryp­tocur­ren­cy cus­tody ser­vice, fol­lowed by Bank of Amer­i­ca which launched a cryp­tocur­ren­cy research ini­tia­tive and BNY Mel­lon announced that it would hold, trans­fer and issue Bit­coin and sim­i­lar cryp­tocur­ren­cies for its asset-man­age­ment clients. Buf­fett is invest­ed in all of them. 

Cryp­tocur­ren­cies and blockchains are com­pli­cat­ed to under­stand and thus many vet­er­ans like Buf­fett may refrain from mak­ing direct invest­ments but at the same time know and under­stand it will be very wor­thy, opined mar­ket experts. 

“Many peo­ple treat cryp­to as a spec­u­la­tive mar­ket and are inter­est­ed only in prof­it book­ing. Where­as some invest in the ecosys­tem they would like to build,” Mer­chant said. 

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