Silicon Valley investor Peter Thiel, famous for early investments in Facebook, SpaceX, Airbnb and PayPal — and more recently for his decimation of Gawker— has invested heavily in bitcoin, it was revealed Wednesday.
Thiel’s San Francisco-based Founders Fund has invested as much as $20 million in the world’s most valuable cryptocurrency, according to the Wall Street Journal.
It is unclear just how much bitcoin the fund currently owns, but sources speaking to the Journal said initial investments began in mid-2017. At that point, the price of one bitcoin was holding steady at between $2,000 and $3,000, according to CoinDesk's Bitcoin Price Index.
In the six months since, the price has skyrocketed, hitting an all-time high of almost $20,000 in December before falling back to around $14,000.
As a result, Founders Fund is reportedly touting hundreds of millions of dollars in returns for its investors.
Bloomberg reports that bitcoin has been popular at Founders Fund since 2012 — when the digital coin was selling for as little as $5.
Bitcoin’s price briefly surged past $15,000 on Tuesday after news of Thiel’s investment, but it has since slipped back to around $14,500.
Thiel’s heavy investment in bitcoin is not a surprise, given he was quoted in October saying he believes critics are “underestimating” the cryptocurrency and that bitcoin is like gold — suggesting he thinks it has more potential as a long-term store of value than as an everyday payment.
Despite initially gaining popularity as a way of anonymously buying drugs and other illicit items on the dark web, institutional investors have increasingly been drawn to bitcoin in recent months, helping drive up its price.
While the Founders Fund investment will be seen as a major signal of confidence for bitcoin, the amount is relatively insignificant for the venture capital firm, which has over $3 billion under management.