“I certainly haven’t invested in crypto. I’m proud of the fact that I avoided it. It’s like a venereal disease or something. I just consider him under contempt,” Munger noted at the annual meeting of the publisher Daily Journal Corp., where Munger is chairman.
Munger, the 98-year-old billionaire investor, has criticized bitcoin in the past, calling digital currency a “rat’s death” and on Wednesday said cryptocurrency should be banned, noting that he “admires[s] the Chinese to ban it” already.
Yet Munger’s harsh words for Bitcoin stand in stark contrast to Wednesday’s reports that Berkshire Hathaway — the investment fund Munger manages with famed investor Warren Buffett — had invested $1 billion in digital bank Nubank. Brazilian with a favorable outlook for Bitcoin.
Berkshire first bought in the São Paulo-based bank in June last year, investing $500 million in the eight-year-old startup. It was a timely investment. Nubank has raised $2.6 billion in its IPO in New York last December, valuing the fintech at more than $40 billion.
According to his prospectus, Nubank has more than 48 million customers in Brazil, Colombia and Mexico. The company claims to have provided more than 5 million people with their first credit cards, extending financial services to the unbanked population of Latin America, which decreases only 20% of the total population in 2020, compared to 45% in 2017.
Seeing growth potential, Berkshire increased its position in Nubank by $1 billion in the final quarter of last year. The investment fund’s big bet on Nubank was revealed in a US Securities and Exchange Commission deposit released on Monday.
Although the bank’s main business is credit and debit services, Nubank also operates an investment platform called NuInvest, which allows users to invest money in an exchange-traded fund (ETF) backed by Bitcoin.
However, reports of the bank’s “crypto-friendly” DNA might be exaggerated. Nubank acquired its open Bitcoin investment platform in 2021 through the purchase of Brazil’s Easynvest, which it later rebranded as NuInvest. And that of society prospectus does not mention income or products based on cryptocurrency.
Nubank, which is still operating at a loss, only lists income from transaction fees, card fees and its investments in financial instruments, which it says are “mainly in highly liquid government bonds”. The bank notes that its future growth depends, in part, on its ability to “keep pace” with technological developments, including “virtual and crypto currencies,” 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 pose a risk to our business”, preventing the bank from performing due diligence on money laundering.
Nonetheless, Berkshire’s exposure to cryptocurrency through its investments in traditional banks has increase as more and more banks offer services in the new fintech product. Munger might be disappointed to learn that he didn’t avoid the “disease” as well as he would have liked.
This story was originally featured on Fortune.com