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

Synopsis

“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.

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  • Charlie Munger says cryptocurrencies should have been banned earlier

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.’
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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. Presented By

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Updated: 02/17/2022 — 07:00