The bitcoin price saw a bullish bump on Wednesday following the publication of a report revealing that legendary Silicon Valley venture capital firm Founders Fund was holding hundreds of millions of dollars in bitcoin.
The bitcoin price had entered the new year trading around $13,000, and it fluctuated between that mark and $14,000 until Jan. 2 at about 18:00 UTC, when it jumped by $2,000 in just two hours. On Bitfinex, the bitcoin price rallied as high as $15,500 — its highest point since Dec. 27 — although it has since declined back to $15,056. Bitcoin now has a market cap of $256.5 billion, which translates into a market share of just under 36 percent.
The day’s market movements have resulted in bitcoin volume being concentrated in several trading pairs that are out of the ordinary. While Bitfinex’s BTC/USD pair remains the most-robust at $857 million, TRX/BTC has surged to $839 million, far outpacing the $484 million traded in South Korean exchange Bithumb’s BTC/KRW market. Two XLM pairs appear in the top 10 as well, a byproduct of the stellar price’s 56 percent single-day rally.
While the cryptocurrency markets posted a general advance on Wednesday, the majority of bitcoin’s movement should be attributed to the Tuesday report that Peter Thiel’s Founders Fund was holding a significant number of bitcoins.
Thiel has been an outspoken proponent of bitcoin, stating that it has “great potential left” and could become the digital equivalent of gold. The firm justified the investment by explaining that it was an attractive — if high-risk — alternative to tech companies, whose valuations have become overstretched during the bull market, according to some analysts.
The firm, which has $3 billion under management, reportedly made an initial investment of $15 million to $20 million in the flagship cryptocurrency, which it allocated into several of its recent funds. The value of that investment has increased dramatically in the ensuing months, and Founders Fund recently told investors that the coins were now worth hundreds of millions of dollars.
Many investors have taken the report as a sign that long-awaited institutional capital is beginning to enter the cryptocurrency markets, potentially leading to an influx of billions of dollars into what has largely been a retail-driven ecosystem.
Write to Josiah Wilmoth at josiah.wilmoth(at)CCN.com.
Featured image from Shutterstock.
Last modified: May 21, 2020 11:22 AM UTC