In addition to Coinbase stock rising over 100% year-to-date, Bitcoin’s recovery in 2023 has helped Cathie Wood’s ARK portfolio.

By 2023, both Bitcoin and Cathie Wood’s investment in Coinbase (COIN) have outperformed Warren Buffett’s well-known “crypto bet” in Brazil’s largest fintech company Nubank (NU).

Bitcoin vs. crypto-exposure stocks NU, COIN

The price of Bitcoin has increased by almost 55% YTD as of March 17. Nubank, in contrast, has only increased by 26%. The biggest recovery of the three has been experienced by Coinbase stock (COIN), another asset with a crypto exposure, which has increased by more than 100% YTD.

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

As of March 17, NU was down 38% year over year, compared to COIN’s 61.76%, which is almost identical to Bitcoin’s 37% losses over the same time period.

Warren Buffett sticks by his neobank investment

In two separate rounds in July 2021 and February 2022, Buffett’s investment company Berkshire Hathaway bought class-A Nubank stock valued at $1.50 billion.

Many people were surprised by the news because Nubank, which has a division called Nucripto, provides cryptocurrency trading services, and Warren Buffett is a well-known opponent of cryptocurrencies. The bank announced in May 2022 that it would give Bitcoin 1% of its net worth.

This action “reinforces the company’s conviction that Bitcoin has the potential to disrupt financial services in the area in the present and the future,” Nubank stated at the time.

According to Berkshire’s most recent annual earnings report, Buffett has not sold a single share despite Nubank’s exposure to cryptocurrencies and the decline in NU’s price.

The choice to hold onto NU despite the challenging market is probably related to Nubank’s expansion in the Latin American banking industry.

The parent company of Nubank, Nu Holdings, reported a strong 2022 with 140% yearly revenue growth and a 38% yearly increase in active customers.

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Cathie Wood doubling down on COIN in 2023

With a 57% decrease in revenue from the previous year, Coinbase’s earnings in 2022 cannot be said to be comparable.

However, Cathie Wood, CEO of ARK Invest, shows no signs of stopping her purchases of COIN shares through her ARK Next Generation Internet ETF (ARKW) and ARK Innovation ETF (ARKK) in 2023. In particular, the COIN purchases make up about 30% of all the stocks bought so far this year.

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

Holding Bitcoin a better strategy?

Bitcoin consistently outperforms stocks as well as stocks with a crypto exposure, as shown by a comparison of the price performance of BTC with the market debut of Coinbase and Nu Holdings. Nevertheless, there have been exceptions, such as the stock boom in the bitcoin mining industry in 2021.

In contrast to traditional stocks, holding Bitcoin is proving to be a better long-term strategy and one with more upside potential.

Since entering the market in December 2021, NU has noticeably declined by more than 50%. BTC has performed better since then, declining by 44% during that time.

Like COIN, which had its initial public offering in April 2021, it has fallen by 80%. But during the same downturn, Bitcoin only dropped by about 50%, outperforming stocks with a crypto exposure, like Coinbase and Nu Holdings, in terms of overall performance.