Bitcoin Beating Warren Buffett’s Crypto Bet on 2023
In 2023, bitcoin BTC ticker down to $26,962. And Cathy Wood’s Coinbase (COIN) investment is finally outperforming Warren Buffett’s popular “crypto bet” in Brazilian fintech giant Nubank (NU).
Bitcoin vs crypto-exposure stocks NU, COIN
As of March 17, the price of Bitcoin is up almost 55% year to date (YTD). By comparison, Nubank is up just 26%. Meanwhile, another crypto exposure asset, namely Coinbase (COIN) stock, has seen the biggest rally of the three, surpassing 100% YTD.
However, Buffett’s investment has fared better than COIN in the past 12 months.
As of March 17, NU is down 38% year-over-year compared to 61.76% for COIN, almost equal to Bitcoin’s 37% losses over the same period.
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Warren Buffett sticks by his neobank investment
Buffett’s investment firm Berkshire Hathaway bought $1.5 billion worth of Nubank Class A shares in two separate rounds in July 2021 and February 2022.
The news came as a surprise to many, as Buffett is a well-known critic of cryptocurrencies and Nubank offers cryptocurrency trading services through one of its wings called Nucrypto. In May 2022, the bank said it would allocate 1% of its net assets to Bitcoin.
“This move reinforces the company’s conviction in the current and future potential of Bitcoin to disrupt financial services in the region,” Nubank said at the time.
But despite Nubank’s crypto exposure and NU’s price plunge, Buffett has not sold a single share, according to Berkshire’s latest annual earnings report.
The decision to hold NU in a difficult market is likely to coincide with Nubank’s growth in the Latin American banking sector.
Nu Holdings, the parent company of Nubank, reported a strong 2022 with 140% year-over-year growth in revenue and a 38% year-over-year increase in active customers.
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Cathie Wood doubling down in 2023
The same cannot be said for Coinbase earnings in 2022 with a 57% drop in revenue year-over-year.
However, Cathie Wood, CEO of ARK Invest, shows no signs of stopping her purchases of COIN shares through her ARK Next Generation Internet ETF (ARKW) and ARK Innovation ETF (ARKK) in 2023. In particular, the COIN purchases make up about 30% of all the stocks bought so far this year.
Coinbase is now Wood’s fifth-largest holding by value, totaling nearly $670 million as of this writing.
Holding Bitcoin a better strategy?
Comparing Bitcoin’s price performance with the request debut of Coinbase and Nu effects reaffirms that BTC not only regularly outperform stocks, but also crypto- exposure stocks. Although exceptions have been seen, similar as with the Bitcoin mining stock smash in 2021. But overall, holding Bitcoin is proving to be a better strategy time-over-year, and likely with further upside eventuality, than traditional stocks. specially, NU has dropped by further than 50 since its request debut in December 2021. Since also, BTC has fared better with a 44 decline in the same period.
Also, COIN is down 80 since its IPO in April 2021. The same down- cycle, still, has seen Bitcoin only losing around 50, arising as better performer overall against crypto- exposure stocks similar as Coinbase and Nu effects.
Bitcoin Beating Warren Buffett’s Crypto Bet
Please Note: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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