Bitcoin beats Warren Buffett’s “crypto bet” in 2023

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

Bitcoin vs. NU Crypto Exposure Stocks, COIN

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

BTC/USD and COIN versus NU’s annual performance. Source: Trading View

Nonetheless, Buffett’s investment has performed better than COIN over the past 12 months.

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

Warren Buffett maintains his investment in the neobank

Buffett’s investment firm, Berkshire Hathaway, purchased $1.50 billion of Nubank Class A shares 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.

“The 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 price drop, Buffett hasn’t sold a single stock, according to Berkshire’s latest annual earnings report.

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

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

Cathie Wood doubles on COIN in 2023

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

Related: Crypto acted as safe haven amid SVB and Signature Bank run: Cathie Wood

But ARK Invest CEO Cathie Wood seems unfazed as she continues to buy COIN shares through her ARK Next Generation Internet ETF (ARKW) and ARK Innovation ETF (ARKK) in 2023. COIN purchases, in particular, account for approximately 30% of all stock purchased so far this year.

COIN weighting in ARK ETF portfolios. Source: Ark Invest

As a result, Coinbase became Wood’s fifth largest holding with a record value of nearly $670 million at the time of writing.

Hold Bitcoin a better strategy?

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

But overall, holding Bitcoin is proving to be a better strategy year over year, and likely with more upside potential, than traditional stocks.

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

NU returns from its market debut against BTC. Source: Trading View

Similarly, COIN is down 80% since its IPO in April 2021. The same bear cycle, however, has only seen Bitcoin lose around 50%, generally outperforming stocks with crypto exposure such as Coinbase and Nu Holdings.

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.