In a medium sauce pan over medium-low heat, melt the butter and Nutella. Stir constantly until smooth. Add salt. Remove from heat.

Pour the peanuts and cereal into a large bowl. Top with warm Nutella mixture and gently mix it around to coat each piece of cereal.

In a large zipped top bag or covered container, add the powdered sugar. Pour the Nutella covered cereal into the large bag or container. Seal the bag or container and shake until all the cereal is coated with the powdered mixture.

Discard excess powder and enjoy. Store at room temperature up to 2 weeks.