Facebook early investor and PayPal co-founder Peter Thiel bought millions of dollars’ worth of Bitcoin through Founders Fund, a VC firm he co-founded , and that number is reported to be worth hundreds of millions today.
According to Wall Street Journal, Founders Fund purchased somewhere between $15 and 20 million dollars’ worth of the Bitcoin throughout 2017, and thanks to the massive price surge that investment is now worth hundreds of millions of dollars.
Since the news broke out, the price of Bitcoin has jumped just over 11%, topping out at $15,000 on Tuesday, January 2. It is unknown though whether the firm has sold any of its cryptocurrency holdings, but the Founder’s Fund Bitcoin portfolio is assumed to be one the largest piece of the firm’s $3 billion venture fund.
The firm reportedly told investors that the investment was a high-risk, high reward bet that was particularly attractive due to overstretched valuations in the tech sector.
“The representatives have told firm backers that a cascade of cash into technology companies has stretched their valuations to historic highs, making stakes in startups as dangerous a risk as ever. Bitcoin, on the other hand, could multiply several times over in the coming years,” the report said.
In addition to its direct investment in Bitcoin, Founders Fund has also purchased stakes in two cryptoasset hedge funds, MetaStable Capital and Polychain Capital.
Prior to launching Founders, Thiel co-founded payment processing giant PayPal and served as its chief executive officer. The entrepreneur, an outspoken libertarian, did not originally believe that Bitcoin could achieve mainstream adoption but later embraced it after observing the ecosystem grow and realizing it could serve as a “reserve form of money.”
In September 2017, when Bitcoin was trading below $6,000, Peter Thiel said that he believed the cryptocurrency had “great potential left” due to the possibility that it could become the “cyber equivalent of gold.”
Many traditional financial institutions have turned away from cryptocurrency, with worries about volatile prices and overall legitimacy at the top of the list of their concerns. However, in recent months some have overcome their reluctance and are actually beginning to integrate Bitcoin and other digital currencies into their systems.
CME Group and CBOE are two such companies to do so, having launched Bitcoin futures trading on their respective exchanges in December 2017.