Warren Buffett’s Berkshire Hathaway has made a significant strategic retreat from the financial sector, liquidating billions of dollars in bank stocks - including a full exit from Nu Holdings, parent company of crypto-integrated digital bank Nubank.
The move, disclosed in a recent SEC filing, marks the end of Buffett’s indirect exposure to crypto platforms and underscores a shift in Berkshire’s approach amid macroeconomic uncertainty, surging cash reserves, and shifting regulatory tides in both traditional finance and digital assets.
The selloff occurred in the first quarter of 2025 and involved a complete divestment from Nu Holdings, Citigroup, and a substantial reduction in Berkshire’s position in Bank of America. In total, Berkshire exited over $2.1 billion in financial stocks in Q1 alone, pushing its cash holdings to a record $347.8 billion - $305.5 billion of which is now parked in short-term U.S. Treasurys.
Buffett’s full divestment from Nu Holdings capped off a high-profile chapter in Berkshire’s investment history. The firm first backed the Brazilian neobank during its 2021 Series G funding round with a $500 million investment, later increasing its stake by another $250 million. Despite Buffett’s vocal skepticism toward cryptocurrencies - famously calling Bitcoin “rat poison squared” - Nu’s growing embrace of crypto didn’t deter Berkshire at the time.
Yet in Q1 2025, the firm sold its remaining 40.2 million shares in Nu at an average price of $11.83 per share. Coupled with earlier selloffs - 20.7 million shares in Q3 2024 and 46.3 million in Q4 - Berkshire netted a total profit of approximately $250 million from the investment.
Notably, this decision was not performance-driven. Nu Holdings reported strong financials, including record Q1 2025 net income of $557.2 million - a 47% year-over-year increase - and $1.97 billion in net income across 2024, up 91% from 2023. The exit, then, appears tied more to a portfolio-wide reassessment of financial sector exposure and crypto-adjacent risks than to company fundamentals.
Crypto Exposure Becomes a Liability?
Nu Holdings has been among the most active banks in Latin America offering crypto services. Through its Nubank Cripto platform, users can buy, sell, and hold assets like Bitcoin, Ethereum, and XRP directly via the app. In 2022, the bank even allocated 1% of its net assets to Bitcoin, granting Berkshire indirect exposure to BTC - a move that stood in stark contrast to Buffett’s anti-crypto rhetoric.
With regulatory discussions around crypto intensifying and institutional scrutiny growing, Berkshire’s exit from Nu could signal discomfort not with crypto performance but with the reputational and regulatory risks of being tied to digital asset ecosystems.
This aligns with a broader trend among legacy investment managers who are increasingly cautious about crypto integration - even as platforms like BlackRock and Fidelity push deeper into digital asset markets via spot ETFs and tokenization initiatives.
Citigroup and BofA Also Offloaded Amid Systemic Risks
Alongside the Nubank divestment, Buffett’s firm also unloaded its entire position in Citigroup - roughly 14.64 million shares valued at $1.12 billion - and reduced its stake in Bank of America by 7.15%, selling 48.66 million shares worth an estimated $2.15 billion.
Citigroup has faced sustained regulatory scrutiny over the past decade, with over $1.5 billion in fines linked to compliance and control failures. The bank’s IT infrastructure has also come under fire, with recent incidents including erroneous fund transfers and digital banking outages. A federal appeals court recently revived a lawsuit against Citi related to a fraud scandal at the Mexican energy firm Oceanografía, potentially exposing the bank to further legal liabilities.
Bank of America, despite retaining Berkshire as a top shareholder, has also struggled with system outages, customer service failures, and regulatory mandates. In 2024, the Office of the Comptroller of the Currency required BofA to implement remedial actions around sanctions compliance and suspicious activity monitoring systems.
These offloads suggest Buffett is rebalancing away from financial institutions grappling with systemic risk, regulatory exposure, and technological fragility, regardless of their earnings or market position.
Macro View: Why Berkshire Is Building Its Cash Pile
Berkshire’s aggressive selloff in banking equities has coincided with a strategic buildup of cash and cash-equivalents. The firm now holds $347.8 billion in liquidity - more than at any other time in its history. Over $305 billion of that is now invested in short-term Treasurys, signaling a strong tilt toward conservative yield-bearing instruments.
This massive cash reserve could be interpreted as a hedge against multiple risks: persistent inflation, monetary policy tightening, unstable banking infrastructure, geopolitical tensions, and the unpredictability of the U.S. election cycle.
Buffett has long favored holding substantial liquidity during periods of market euphoria or structural risk. His recent moves indicate he sees more downside or volatility ahead—despite equity markets rallying and crypto prices hitting new highs.
Crypto, Traditional Finance, and the Buffett Paradox
Buffett’s retreat from Nubank is especially notable given the bank’s strong financial performance and its expanding footprint in the crypto economy. This raises a fundamental question: what exactly is driving Berkshire’s moves?
Some observers argue that crypto’s increasing entanglement with traditional finance - via banking services, ETF custody, and tokenized assets - has made it harder for legacy firms to hold positions without indirect exposure. Buffett’s exit from Nu, then, may reflect a wider discomfort with the blurred lines between regulated finance and decentralized infrastructure.
Others interpret the exit as part of a generational shift. As Buffett prepares for succession at Berkshire, his conservative stance may no longer align with the digital financial tools and platforms favored by younger investors, institutions, and regulators. By divesting, Berkshire could be positioning its portfolio for a more traditional risk profile in preparation for leadership transition.
Implications for Crypto and DeFi
While Buffett’s exit won’t materially impact Nubank’s operations or the broader crypto sector, it does reflect a divergence in how traditional and decentralized finance view growth, risk, and value.
Crypto firms have argued that the next stage of industry growth depends on integrating real-world assets, banking services, and credit infrastructure into blockchain ecosystems. That integration increasingly includes partnerships with fintechs and banks - like Nubank - that serve as the front-end to onchain activity.
Berkshire’s sale suggests that, for now, legacy institutions may be unwilling to embrace platforms with even peripheral ties to digital assets. Whether that posture holds as U.S. regulators warm to stablecoins, ETFs, and tokenized treasuries remains to be seen.
Meanwhile, Nubank continues to expand its services, with plans to grow its crypto offerings and increase its regional footprint across Latin America.
Final thoughts
Buffett’s latest moves don’t necessarily signal a rejection of fintech or crypto - they reflect a portfolio realignment in response to evolving risks and opportunities.
With Berkshire sitting on record cash and pivoting toward safer assets, the firm is positioning itself to withstand potential market shocks, capitalize on downturns, and preserve capital through volatility. At the same time, its retreat from Nu Holdings, Citigroup, and BofA hints at a growing reluctance to engage with companies facing regulatory scrutiny, systemic risk, or entanglements with crypto - no matter how profitable they appear on paper.
As the lines between traditional finance and decentralized systems continue to blur, Buffett’s actions underscore a key divide in the market: between those willing to embrace hybrid models of finance and those choosing to stay firmly in the old world. Only time will tell which path delivers the best returns.