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Recently, there has been widespread circulation in the cryptocurrency community regarding "Stock God Buffett investing in cryptocurrencies": Buffett has finally acknowledged the value of Bitcoin and invested a total of $700 million in a bank named New Bank, which supposedly allows customers to trade Bitcoin.
At first glance, this news seems highly surprising, as Buffett has been consistently against investing in cryptocurrencies for many years, even stating that cryptocurrencies are rat poison. Now that the "Stock God's" attitude has seemingly changed, could it add fuel to the recent surge in cryptocurrency prices?
However, upon careful verification, the information in this news is riddled with inaccuracies and can be considered a case of misinformation.
Firstly, the New Bank mentioned in the screenshot of the rumor has no connection whatsoever with cryptocurrencies or Buffett.
According to the official website of New Bank, the bank was founded by a group of Korean-Americans on September 29, 2006, as an independent community bank in the United States. It operates six retail branches in New York and New Jersey, focusing on providing financial solutions to local small business owners—essentially similar to small loan companies in China.
As per the company's official website, New Bank doesn't operate any cryptocurrency-related business and has not received any investment from Buffett.
In the author's opinion, the rumor of "Buffett investing in New Bank" may have confused New Bank with Nu Bank, the latter seeming to fit the characteristics of the rumored "bank with cryptocurrency business that Buffett invested in."
Nu Bank is a large financial technology company in Latin America, and its parent company is Nu Holdings (NYSE: NU). Founded in 2013, the company serves nearly 94 million customers in Brazil, Mexico, and Colombia. In addition to traditional banking services, Nu Bank operates a digital financial platform called Nucripto for trading Bitcoin and Ethereum.
Reportedly, in June 2021, Berkshire Hathaway led the extension of Nu Bank's Series G financing, investing $500 million in the company.
After Nu Holdings went public on the U.S. stock market in December 2021, Berkshire's 13F filings for Q4 2021 showed that Berkshire Hathaway held $1 billion worth of Nu Bank Class A shares. However, Buffett has not made any further additions to this position since then.
In some circulating rumors, Nu Bank is erroneously introduced as the parent company of New Bank. However, in reality, besides having similar sounding names, there is no connection between them. Official documents of both companies do not show any equity-related link, and Nu Bank's business only covers Latin America, with no mention of any operations in the United States.
Is an old story being presented as a new one?
Since Nu Bank went public on the U.S. stock market in 2021, its stock price has been subject to fluctuations based on its association with cryptocurrency trends. In 2021 and 2022, as the cryptocurrency market weakened, Nu Bank's stock price fell by 16% and 56%, respectively. However, in 2023 and early 2024, with the rebound in cryptocurrency prices, Nu Bank's stock price increased by 104% and 33%, respectively.
The recent rise in Nu Bank's stock price might be one of the reasons the cryptocurrency community is paying attention to it again. However, it's essential to note that Buffett's investment in Nu Bank occurred around three years ago, before the company's IPO. This means that the "Buffett investment" mentioned in the rumor is actually old news.
Moreover, Buffett's investment in Nu Bank was in 2021, while Nu Bank launched its cryptocurrency trading platform, Nucripto, in 2022. Therefore, Buffett's investment in the company may not necessarily signify approval of its cryptocurrency trading business.
In fact, Buffett's investment in Nu Bank may reflect his consistent "value investing" philosophy. Nu Bank was founded by David Velez, a venture capitalist with experience at Sequoia Capital. Besides having an experienced founder, Nu Bank experienced rapid business growth, achieving a significant increase in user numbers in the ten years since its establishment, leveraging financial technology to fill gaps in financial services in the underserved Latin American market. Currently, the bank has reached 87.8 million users in Brazil, representing half of the country's adult population, making it the fourth-largest bank in the country.
According to Nu Bank's latest financial report, most of the company's revenue still comes from traditional financial products such as credit cards, insurance policies, and traditional investment accounts. Buffett's investment may not have much to do with cryptocurrencies after all. |
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Post time 12-3-2024 14:14:17