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Forex News: Peter Thiel's Founders Fund Bets Big On Bitcoin

Peter Thiel's Founders Fund Bets Big On Bitcoin

01/03/2018 - 09:37:00 (RTTNews)

(RTTNews) - Peter Thiel, who is Paypal co-founder and an angel investor known for early bets on Facebook and SpaceX, has added bitcoin into his portfolio even as other venture capitalists remain wary of the highly volatile cryptocurrency.

Founders Fund, a venture capital firm co-founded by Thiel, bought around $15 million to $20 million bitcoin, the Wall Street Journal reported Tuesday, citing unnamed sources. This forms a minuscule part of the firm's total assets of more than $3 billion.

The WSJ report further said the investment is spread across several of the firm's most recent funds. This includes one fund started in 2017 that has bitcoin as one of its first investments.

Thanks to bitcoin's surge in 2017, the holdings are now worth hundreds of millions of dollars, the firm reportedly told its investors.

The price of bitcoin spurted nearly 9 percent to $15,030 as of 2.44 pm ET, Tuesday on coinbase, after the news of Thiel's monster bet on the digital currency hit the wires.

Meanwhile, Bloomberg reported that Thiel's firm had been buying small amounts of bitcoin since 2012, totaling no more than $20 million. That move would be true to his reputation of betting early in nascent technology.

Citing an unnamed person familiar with the matter, Bloomberg said Thiel found bitcoin expensive in November and was comfortable buying it around $2,000 to $3,000.

The firm's bitcoin investments are not made public yet.

The Bloomberg report also cited a Founders Fund spokeswoman as confirming that the firm invested in bitcoin infrastructure providers such as BitPay, BitGo, Polychain and MetaStable.

Thiel has voiced support for bitcoin earlier, while remaining skeptical of other crytpocurrencies.

In October last year, Thiel had said people are "understimating" the value of bitcoin. He said it has great potential if it ends up being the cyber equivalent of gold.

"It is like a reserve form of money, it's like gold, and it's just a store of value," Thiel said during an investor conference in Riyadh, Saudi Arabia. "You don't need to use it to make payments."

Further, Thiel said bitcoin is based on "the security of math" which means it cannot be diluted by any government, or hacked, and hence, it is absolutely secure.

However, traditional finance is yet to welcome bitcoin entirely into the mainstream though the Chicago exchanges have started futures trading in the digital currency. Many prominent bankers such as Jamie Dimon has called it a "fraud".

Governments and central banks are also uncomfortable with the recent surge in the cryptocurrencies' value. China has already banned initial coin offerings and India likened these currencies to ponzi schemes in a warning to investors, reiterating that they are not legal tender.

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