Peter Thiel’s San Francisco-based venture capital firm Founders Fund has invested millions of dollars into Bitcoin (BTC), the The Wall Street Journal (WSJ) reported today, citing sources “familiar with the matter”.
The firm’s initial investment in bitcoin amounted to around $15 million to $20 million, but the value of that investment now numbers in the hundreds of millions due to bitcoin’s yearlong rally in 2017. The source did not disclose whether Founders had sold any of its bitcoin or continues to hold the entire balance.
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 has also purchased stakes in two cryptoasset hedge funds, MetaStable Capital and Polychain Capital.
The market reacts
Since the WSJ reported on the Founder Fund’s BTC investments, the price of the leading cryptocurrency has gone up, growing almost 14 percent in the past few hours to a peak of $15,444 a coin. BTC has been trading sideways since, priced at around $15,000 at press time.
The price boost today follows a volatile past few weeks, after the coin hit an all-time high of over $20,000 in late December and then crashed to as low as $11,833 on December 22. Today, BTC dominance reached a new all-time low of 34.97 percent, reflecting an increased market interest in altcoins.
Other well-known mainstream investors to bet on Bitcoin recently include Bill Miller, who told reporters in mid-December that 50 percent of his hedge fund’s money was invested in the leading cryptocurrency.
The launch of Bitcoin futures last month on two major American exchanges has also brought more mainstream investors into the cryptocurrency market.