Nubank is feeling brave with plans to launch its own crypto Nucoin – The Average Joe

    Nubank is feeling brave with plans to launch its own crypto Nucoin

    Victor Lei — Head of Research

    October 20, 2022

    October 20, 2022

    Nubank is the largest Latin American digital bank (a.k.a. neobank). This week, they announced plans to launch their own crypto — Nucoin. Uh oh, is that Matt Damon?

    You may know one of Nu’s largest shareholders…

    … Berkshire Hathaway, run by the famous Warren Buffett. Yes, the same Buffett that’s been highly vocal against crypto.

    Nubank is listed as Nu Holdings (NYSE:NU) — having gone public last December, a couple of weeks before peak market. Unfortunately for Nubank, fintechs got hit even harder — sending $NU down 63% since.

    • As $NU declined, Berkshire doubled down on the company in February.
    • And Buffett, too, is a bag holder (meme: one of us!) — down an estimated 53% on his $NU holdings.

    But Nu is built differently. They’re not losing nearly as much as major fintechs — having lost $30M on $400M in sales in the last quarter. They’ve also managed to maintain their triple digital growth — although having slowed significantly.

    Nubank channels its inner Matt Damon

    …by being brave. Nubank’s bread and butter is online banking — but in recent years, they’ve taken an interest in crypto.

    This July, they launched their crypto exchange which reached 1.8M users — a fraction of Coinbase’s 103M registered users. Now they’re going a step further…

    By launching their own crypto, Nucoin, by 2023. But it won’t exactly be like Bitcoin or Ethereum. Here’s what we know about the crypto so far:

    • Used as a loyalty and engagement tool for its other products.
    • Holders will have access to discounts and perks.

    Other crypto exchanges like FTX and Binance offer lower trading fees by holding onto their crypto, $FTT and $BNB. Nucoin could work similarly.

    Investors: Cool experiment, bro

    Few crypto experiments from major companies have shown much traction. JPMorgan also launched its own stablecoin, JPM Coin — accessible to corporate clients.

    But at its core, Nubank is still a digital bank, and investors should look at its crypto as a loyalty program rather than a major driver of revenue. It’s only gravy at this point.

    The Average Joe: “We’re keeping our eyes on you, $NU. What worries us is the valuation — but you gotta pay up when buying a company that’s near profitable and growing as fast as it is.”

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