Bitcoin Beats Warren Buffett’s ‘Crypto Bet’ in 2023

by · March 17, 2023

In 2023, Bitcoin (BTC) and Cathie Wood’s Coinbase (COIN) investment will finally surpass Warren Buffett’s popular “crypto bet” in Brazil’s fintech giant Nubank (NU).

Bitcoin vs. crypto exposure shares NOW, COIN

As of March 17, Bitcoin’s price is up nearly 55% year-to-date (YTD). In comparison, Nubank has risen by only 26%. Meanwhile, another crypto exposure asset, Coinbase stock (COIN), has seen the biggest decline of the three, rising over 100% YTD.

BTC/USD and COIN vs NU annual performance. Source: TradingView

Still, Buffett’s investment has outperformed COIN over the past 12 months.

As of March 17, NU is down 38% year-over-year compared to COIN’s 61.76%, nearly equaling Bitcoin’s loss of 37% over the same period.

Warren Buffett sticks to his neobank investment

Buffett’s investment company Berkshire Hathaway bought Class A Nubank shares for $1.50 billion in two separate rounds in July 2021 and February 2022.

The news came as a surprise to many since Buffett is a well-known cryptocurrency critic, and Nubank offers crypto trading services through one of its wings called Nucripto. In May 2022, the bank said it would allocate 1% of its net assets to Bitcoin.

“This move reinforces the company’s belief in Bitcoin’s current and future potential to disrupt financial services in the region,” Nubank said at the time.

But despite Nubank’s crypto exposure and NU’s share price decline, Buffett hasn’t sold a single share, according to Berkshire’s latest annual earnings report.

The decision to continue holding NU through a rough market likely coincides with Nubank’s growth in the Latin American banking sector.

Nu Holdings, the parent company of Nubank, reported a solid 2022 with 140% year-on-year growth in revenue and 38% year-on-year increase in active customers.

Cathie Wood doubled down on COIN in 2023

The same cannot be said for Coinbase’s earnings in 2022 with a 57% drop in revenue year over year.

Related: Crypto served as safe haven among SVB and Signature bank run: Cathie Wood

But ARK Invest CEO Cathie Wood seems unfazed by continuing to buy COIN stocks via her ARK Next Generation Internet ETF ( ARKW ) and ARK Innovation ETF ( ARKK ) in 2023. Notably, COIN purchases make up about 30% of all the share bought so far this year.

COIN weight across ARK ETF’s portfolios. Source: Ark Invest

As a result, Coinbase has become Wood’s fifth largest holding on record worth nearly $670 million at the time of writing.

Is Bitcoin Holding a Better Strategy?

Comparing Bitcoin’s price performance with the market debut of Coinbase and Nu Holdings confirms that BTC not only consistently outperforms stocks, but also stocks with crypto exposure. Although exceptions have been seen, such as with the Bitcoin mining stock boom of 2021.

But overall, holding Bitcoin has proven to be a better strategy year over year, and probably with more upside potential, than traditional stocks.

Notably, NU has fallen by more than 50% since its market debut in December 2021. Since then, BTC has outperformed with a 44% decline over the same period.

NU’s return since market debut vs. BTC. Source: TradingView

Similarly, COIN is down 80% since its IPO in April 2021. However, the same bear cycle has seen Bitcoin only lose around 50%, outperforming stocks with crypto exposure like Coinbase and Nu Holdings overall.

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.