Warren Buffett Saves Face

Amanda Heckman|February 19, 2022

Well, well, well.

The Oracle of Omaha is eating his words.

Berkshire Hathaway just made a big move into a sector that Buffett had pledged to stay out of.

Perhaps after reading our words over the past year and a half, he now gets it.

Buffett just got into crypto.

Rat Poison No More

You may recall that he called crypto “rat poison” back in 2018.

A year later, he said it was a dead asset that “has no unique value at all.”

But he’s singing a different tune these days.

We may have helped him see the light.

After all, we first started writing about our excitement for crypto’s potential in 2020. That’s when Andy made his first-ever crypto pick for Manward Letter readers. He has since made crypto a big part of his Modern Asset Portfolio.

As crypto made waves, we dug deep into its impact on the economy and our money. We told of its widespread use and its growing list of big-name buyers. We told you how in a world of ultra-low interest rates, investors would be smart to put some money into crypto to find the growth they’re looking for.

Looks like Buffett’s finally caught on.

Bank on It

Berkshire just told the world that it has bought $1 billion (yup, “billion” with a “b”) worth of shares in a digital bank that offers crypto services.

Nubank is based in Argentina and is the largest digital bank in Latin America. As a “neobank,” it works outside of normal banking rules.

Neobanks are fintech firms that don’t have federal regulators and aren’t federally insured. They also don’t have physical branches.

Instead, they offer services through an app or on a website.

Nubank serves a large Latin American population – a demographic with a distrust for traditional banks – in a region that has become a fintech hotspot (and has offered plenty of reasons for distrust).

But what stands out about Buffett’s move is that Nubank’s customers are able to invest in a Bitcoin ETF through its investment division, Nu Invest.

Now, even though Nubank is not itself a crypto firm, it’s likely to take on more exposure to crypto.

The Association for Private Capital Investment in Latin America found that crypto-related venture spending in the region saw a tenfold year-over-year increase in 2021.

And two of the region’s latest $1 billion unicorns, Mercado Bitcoin and Bitso, are crypto exchanges.

It’s clear Buffett is eating his words… and they taste a lot like crypto.

He sees the huge opportunity that comes with it – especially in an emerging economy with a growing fintech industry.

We’re just glad he’s finally joining the party.