Months after Berkshire Hathaway plowed $1 billion into a Brazilian digital bank with ties to cryptocurrency, company vice chairman Charlie Munger had some choice words for Bitcoin and its kind.
“I certainly didn’t invest in crypto. I’m proud of the fact I’ve avoided it. It’s like a venereal disease or something. I just regard it as beneath contempt,” Munger said during the annual meeting of the publisher Daily Journal Corp., where Munger serves as chairman.
Munger, the 98-year-old billionaire investor, has criticized Bitcoin in the past, calling the digital currency “rat poison” and, on Wednesday, said cryptocurrency should be banned, noting he “admire[s] the Chinese for banning it” already.
Yet Munger’s harsh words for Bitcoin strike a glaring contrast to reports on Wednesday that Berkshire Hathaway—the investment fund Munger manages with famed investor Warren Buffett—had invested $1 billion in Nubank, a Brazilian digital bank with a Bitcoin-friendly outlook.
Berkshire first bought into the São Paulo–based bank in June of last year, investing $500 million in the eight-year-old startup. It was a timely investment. Nubank raised $2.6 billion in its New York IPO last December, valuing the fintech firm at over $40 billion.
According to its prospectus, Nubank has over 48 million customers across Brazil, Colombia, and Mexico. The company says it has provided over 5 million people with their first ever credit cards, extending financial services to Latin America’s unbanked population, which decreased to just 20% of the total population in 2020, from 45% in 2017.
Seeing growth potential, Berkshire increased its position in Nubank by $1 billion in the last quarter of last year. The investment fund’s big bet on Nubank came to light in a U.S. Securities and Exchange Commission filing released Monday.
Although the bank’s main trade is credit and debit services, Nubank also runs an investment platform called NuInvest, which allows users to invest money in a Bitcoin-backed exchange-traded fund (ETF).
However, reports of the bank’s “crypto-friendly” DNA might be overblown. Nubank acquired its Bitcoin-open investment platform in 2021 through the purchase of Brazil’s Easynvest, which it then rebranded as NuInvest. And the company’s prospectus doesn’t mention revenues or products built on cryptocurrency.
Nubank, which still operates at a loss, only lists revenue from transaction fees, card fees, and its investments in financial instruments, which it says are “primarily in highly liquid government bonds.” The bank does note that its future growth depends, in part, on its ability to “keep pace” with tech developments including “virtual and cryptocurrencies,” but even that comes with a caveat.
Nubank warns that “cryptocurrencies and blockchain could limit our ability to track the movement of funds and therefore present a risk to our company,” by preventing the bank from performing due diligence on money laundering.
Nevertheless, Berkshire’s exposure to cryptocurrency through its investment in traditional banks has increased as more banks offer services in the newfangled fintech product. Munger might be disappointed to learn he hasn’t avoided the “disease” quite as well as he’d like.
This story was originally featured on Fortune.com
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