In 2023, Bitcoin and Coinbase investments are outperforming Warren Buffett’s “crypto bet” in Nubank.
The surprising turn of events has brought the crypto market into focus, highlighting Bitcoin’s potential as a better strategy year-over-year than traditional stocks and crypto-exposure stocks.
Buffett holds onto his neobank investment
Buffett’s investment firm Berkshire Hathaway invested $1.50 billion in class-A Nubank stock in July 2021 and February 2022.
Despite being a cryptocurrency critic, Buffett has not sold a single share, even though Nubank offers crypto trading services through Nucripto.
Nubank announced in May 2022 that it would allocate 1% of its net assets to Bitcoin, reinforcing its conviction in Bitcoin’s potential to disrupt financial services in the region.
As of March 17, Bitcoin’s price has surged by almost 55% year-to-date (YTD), while Nubank has only seen a 26% increase. Meanwhile, Coinbase stock (COIN) has experienced the biggest rebound, rising over 100% YTD.
Despite this, Buffett’s investment in Nubank has performed better than COIN in the last 12 months. As of March 17, NU has decreased by 38% year-over-year, while COIN has experienced a 61.76% decline, which is similar to Bitcoin’s 37% losses during the same period.
Cathie Wood remains bullish on Coinbase
Meanwhile, Cathie Wood, CEO of ARK Invest, remains optimistic about Coinbase’s future and continues to buy COIN shares through her ARK Next Generation Internet ETF and ARK Innovation ETF in 2023.
COIN shares account for approximately 30% of all the stock purchased by Wood so far this year, making Coinbase her fifth-largest holding worth nearly $670 million at the time of writing.
Bitcoin outperforms stocks and crypto-exposure assets
When comparing Bitcoin’s price performance to the market debut of Coinbase and Nu Holdings, it becomes evident that BTC not only outperforms stocks but also crypto-exposure stocks consistently.
Although there have been exceptions like the Bitcoin mining stock boom in 2021, holding Bitcoin is proving to be a more lucrative year-over-year strategy with greater potential for growth compared to traditional stocks.
NU has dropped by over 50% since its market debut in Dec 2021, while BTC has only decreased by 44% during the same period. COIN, on the other hand, has declined by 80% since its IPO in Apr 2021, whereas Bitcoin has only lost around 50%.
Hence, Bitcoin has emerged as a better overall performer compared to COIN and NU in the current market down-cycle.
The crypto market’s performance in 2023 highlights the potential for Bitcoin to outperform traditional stocks and crypto-exposure stocks, making it an attractive investment opportunity for investors seeking long-term growth.