Bitcoin Pays off for Peter Thiel and Founder’s Fund

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During the fourth quarter of 2017, Bitcoin experienced almost unprecedented gains in value, rising briefly to more than $19,000 before adjusting to close the year trading slightly under $14,000. Through all of this volatile expansion, large Bitcoin reserves quietly held by Peter Thiel’s venture capital group Founder’s Fund were achieving tremendous gains in value.

According to recent reports, Founder’s Fund acquired a substantial share of Bitcoin at some point prior to the cryptocurrency’s large fourth quarter growth streak. The value at the time of purchase is estimated to have been between $15 and $20 million, though the exact volume of Bitcoin held by the fund is unknown. That Bitcoin is now worth some hundreds of millions of dollars and is spread across multiple different subsidiary funds held by the firm.

Mr. Thiel, best known for his role as one of the founders of PayPal, has never previously disclosed his own Bitcoin holdings, but has spoken favorably of the digital currency in the past. In October of 2017, Thiel compared Bitcoin to gold in terms of being a reserve store of value, rather than a currency intended to be spent in day-to-day transactions.

It is not currently known whether or not Founder’s Fund has liquidated any of the Bitcoin in its reserves. Thus far, neither Thiel nor the fund itself has made any direct comment about the report of its Bitcoin holdings, which originally appeared in The Wall Street Journal on Tuesday.

That report, however, did have an immediate impact on the value of Bitcoin. In the hours following the release of the Journal report, the cryptocurrency surged upward in price by nearly $1,000 after early trading that had already been on a more modest upward trend. Bullish outlooks for Bitcoin continued into Wednesday, with prices breaking $15,000 by mid-morning.

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