The price of Bitcoin rose 13% on Wednesday following reports that Founders Fund has been buying the cryptocurrency since 2012
According to a Wall Street Journal report on Tuesday that cites unnamed sources, The Founders Fund – the San Francisco-based venture capital firm co-founded by early Facebook investor Peter Thiel – had reportedly purchased between $15m to $20m worth of bitcoin, which is now worth hundreds of millions of dollars.
According to the report, the firm’s bitcoin purchases have been spread across several of its most recent funds, the persons said, including one that began investing in mid-2017 and made bitcoin one of its first investments.
Bitcoin’s valuation ended the year at about $14,000 — up from nearly $1,000 at the start of 2017 and its volatility has alarmed some economists, who worry of a bubble.
According to research firm CB Insights, during 2016 and 2017 Venture capital firms have invested more than $1.38 billion into blockchain startups — which are companies working on the technology underlying bitcoin.
Other prominent venture capitalists that have invested in bitcoin include Tim Draper, who bought nearly 30,000 bitcoins in a 2014 and the Winklevoss twins Cameron and Tyler who became the worlds first “bitcoin billionaires” in 2017.
Despite bitcoin’s growing hype and popularity, few mainstream institutions have invested in the cryptocurrency, citing its speculative value and the volatility of its pricing — its price can swing by double-digit percentage points in a matter of hours.