Well, if Bitcoin fans were looking for a catalyst to jumpstart things in 2018, they’ve got one now. Just moments ago, this hit:
- PETER THIEL’S FUND IS SAID TO HOLD LARGE AMOUNT OF BITCOIN: WSJ
The reaction in Bitcoin was swift:
This represents a big vote of confidence in Bitcoin at a time when the rally looked like it was set to stall.
Thiel’s Founders Fund is of course a titan and is well-known for its early stake in Facebook. It also has stakes in Airbnb Inc., SpaceX and Lyft, among dozens of others.
According to the Wall Street Journal (citing the ubiquitous “people familiar with the matter”), Founders has “amassed hundreds of millions of dollars of [Bitcoin].” The gamble “has been spread across several of the firm’s most recent funds including one that began investing in mid-2017 and made bitcoin one of its first investments.”
The original investments are said to have totaled around $15 to $20 million. That position is now worth multiples of that. Here’s WSJ:
By buying bitcoin outright, as opposed to backing other companies doing business in the space, Founders would seem to be breaking with its investing tradition, an investor said. But in communications with investors, Founders representatives have sought to cast the investment as a high-risk, high-reward wager similar to its other venture bets, the people familiar with the matter said.
So basically, they’re pitching this as something akin to any other VC bet – it could go to the moon or it could be worth nothing.
That’s fair, but it may be something of a false equivalence designed to allay investor fears. Because after all, this could go to zero in days and if it does, there is no salvage value whatsoever.
Oh, and a friendly reminder from a pro:
Put aside your view of bitcoin, and apply trading 101 to this headline:
Peter Thiel’s Founders Fund Makes Monster Bet on Bitcoin – from WSJ https://t.co/sISlOjONJv
When a big trader announces they have bought a monster position, all it does is explain past action – not future.
— the MacroTourist (@kevinmuir) January 2, 2018