Plus, My 2 Takeaways From This Year’s Super Bowl Ads
Welcome to your Sunday digest…my weekly breakdown of the things we’re thinking about and talking about in the Global Intelligence world.
First up this week…America’s most famous investor makes a big U-turn on crypto.
Since crypto’s inception, Warren Buffett has been highly critical of the sector. Two years ago, he said “cryptocurrencies basically have no value,” adding that “I don’t have any cryptocurrency and I never will.”
He once even called bitcoin a “delusion” and “probably rat poison squared.”
Now, the famed “Oracle of Omaha” has done an about-face…to the tune of $1 billion.
Recently, we learned from a filing with the Securities and Exchange Commission that Buffett’s company, Berkshire Hathaway, has dumped its positions in Visa and Mastercard and invested $1 billion in Nubank.
Brazil-based Nubank is a crypto-friendly digital bank…the largest one of its kind in Latin America. Its investment unit, NuInvest, allows users to put money in a bitcoin exchange-traded fund.
By investing in Nubank, Buffett hasn’t bought crypto directly. However, the fortunes of Nubank are tied in part to the crypto markets. Therefore, Buffett is clearly bullish on crypto. After all, you wouldn’t invest in a crypto-leveraged bank unless you thought crypto prices were going to rise from here.
So, there you have it…even Warren Buffett has seemingly come around on crypto. If that doesn’t signal full Wall Street acceptance of crypto, I don’t know what does.
Next up…the Super Bowl.
The NFL’s annual showpiece is one of my favorite occasions…not just because of the game itself, which was epic this year (how on Earth did Cooper Kupp keep getting open on that final Rams’ drive)…but for the advertisements.
The Super Bowl ads are an excellent way to assess the cultural and business zeitgeist of America.
And my two big takeaways this year…crypto and EVs.
The large cryptocurrency exchange Crypto.com had a new Super Bowl ad featuring LeBron James. It’s important not to underestimate the power of that kind of advertising.
The Lakers star is one of the foremost figures in American life. His endorsement of a crypto exchange, and crypto in general, will only help further push Main Street acceptance of crypto. (Crypto.com is a good exchange, by the way, and one of several centralized exchanges, alongside Binance.US and Coinbase, that I regularly use.)
During the Super Bowl, seven auto brands showed eight advertisements. Of those eight, six were solely about electric vehicles.
That’s remarkable when you consider that less than 10% of new cars sold last year were electric vehicles.
Clearly, the auto industry, as a whole, has decided that EVs are the future, and there will be a lot of big winners and big losers in this transition.
I’ll be watching this space carefully for investment opportunities…
Finally, this week…Amazon and Visa sign a peace deal.
Back in late November, I wrote to you about Amazon going to war with Visa. (If you missed that column, you can read it here.)
Basically, the online retail giant said it would stop accepting payments from U.K.-issued Visa credit cards amid a dispute over fees. Amazon had previously introduced surcharges for Visa credit card users in Singapore and Australia.
Basically, Amazon was unhappy with the level of fees it had to shell out to Visa for processing card payments. At the time it said that card payment fees should be declining due to advances in technology, “but instead they continue to stay high or even rise.”
Well, this week…the two sides came to an agreement. As part of this deal, Visa said its cards would be accepted at all Amazon stores and sites.
The details of the agreement were not publicized, but I’m willing to bet more than a few shiny pennies that Visa capitulated and offered better terms to Amazon.
As I wrote back in November, there was a time when Amazon was beholden to card companies like Visa to process payments. Now that’s changed.
Today, Amazon has more market power than Visa. After all, who wants a credit card that you can’t use on Amazon?
So, I’m betting Visa was forced to back down and offer concessions. However, if Visa execs think this is the end of the story, they’d better think again.
It won’t be long before Amazon is back seeking another cut to the fees it pays Visa. And then another…and then another.
Why would Amazon do this?
Because it can. And because it knows the day is coming when all online payments move to the cryptoconomy and the blockchain, where secure, automated transactions and tiny fees will be the norm.
Maybe that’s why Buffett dumped his Visa and Mastercard holdings…
That brings us to the end of this week’s digest. Many thanks for being a subscriber. And if you have any feedback or questions, reach out through the contact form on the Global Intelligence website.