One of Silicon Valley's most respected venture capital firms has stockpiled hundreds of million dollars in bitcoin.
Citing several people familiar with the matter, The Wall Street Journal reports that Founders Fund is sitting on several thousand bitcoins, spread across several of its recently-launched funds.
Co-founded by billionaire Peter Thiel, Founders Fund has more than $3 billion under management and has made lucrative bets on Facebook, Airbnb, and Lyft.
Prior to launching Founders, Thiel co-founded payment processing giant PayPal and served as its chief executive officer. The entrepreneur, an outspoken libertarian, did not originally believe that bitcoin could achieve mainstream adoption but later embraced it after observing the ecosystem grow and realizing it could serve as a "reserve form of money."
In September of last year — when bitcoin was trading below $6,000 — Thiel said that he believed bitcoin had "great potential left" due to the possibility that it could become the "cyber equivalent of gold."
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.