Warren Buffett’s Anti-BTC Stance Remains An Inverse Bitcoin Price Indicator
In 2023, Bitcoin emerged as a top-performing investment asset. It outpaced Warren Buffett and his “crypto bet” in Brazil’s fintech giant Nubank (NU). Meanwhile, Cathie Wood’s Coinbase (COIN) investment is also rising, with the stock gaining over 100% year-to-date.
Warren Buffett Is A Good Indicator for BTC
Bitcoin’s current price has surged by nearly 55% year-to-date, while Nubank has only increased by 26%. In contrast, Coinbase has seen the biggest rebound of the three, rising over 100% year-to-date.
Despite this, Buffett’s investment in Nubank has performed better than COIN over the past year. As of March 17, NU is down 38% year-over-year, while COIN has declined by 61.76%. That nearly equals Bitcoin’s 37% losses in the same period.
Berkshire Hathaway, Buffett’s investment firm, purchased $1.50 billion of class-A Nubank stock in two separate rounds in July 2021 and February 2022. This move surprised many, as Buffett is a well-known cryptocurrency critic. Yet, Nubank offers crypto trading services via its wing, Nucripto. In May 2022, the bank announced allocating 1% of its net assets to Bitcoin.
According to Berkshire’s latest annual earnings report, Buffett has not sold a share despite Nubank’s crypto exposure and the decline of NU. The remarkable development shows Warren Buffett doesn’t always put his money where his mouth is.
That decision likely coincides with Nubank’s Latin American banking sector growth. The parent company of Nubank, Nu Holdings, reported a solid 2022 with 140% year-on-year growth in revenue.
Is 2023 The Year For Coinbase Stock?
Coinbase, on the other hand, saw a 57% drop in year-over-year revenue in 2022. Nevertheless, ARK Invest CEO, Cathie Wood, remains unfazed, continuing to buy COIN shares via her ARK Next Generation Internet ETF (ARKW) and ARK Innovation ETF (ARKK) in 2023. A bounce in COIN stock prices will occur eventually, but blood has been shed in the past twelve months.
The COIN buys account for roughly 30% of all the stock purchased this year. That makes Coinbase Wood‘s fifth-largest holding, worth nearly $670 million at the time of writing. It isn’t necessarily sensible to put so many eggs into one basket. Even if that company is a household name in the cryptocurrency industry.
BTC regularly outperforms not only stocks but also crypto-exposure stocks. But, of course, exceptions have been seen, such as with the Bitcoin mining stock boom in 2021. Even so, naysayers like Warren Buffett will gladly tell onlookers this is all a “fad”.
However, holding Bitcoin is proving a better year-over-year investment strategy with more upside potential than traditional stocks.
With the ongoing growth in the cryptocurrency market and the traditional stock market, it remains to be seen how the investment landscape will change.
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