Bitcoin is getting a bump on reported interest from yet another famed investor. Peter Thiel, co-founder of venture-capital firm Founders Fund “amassed hundreds of millions of dollars” of the cryptocurrency, according to WSJ’s Rob Copeland.
The price of bitcoin is up nearly 10% so far Wednesday to around $15,100. Meanwhile the Bitcoin Investment Trust (GBTC) is up almost by that much or 7%, trading at a near 70% premium to its net asset value.
On Wednesday, RBC Capital Markets‘ Mitch Steves joined the bulls, outlining a $10 trillion case for cryptocurrency and blockchain. Steves highlighted the potential of a secure “world computer” untethered from a third-party intermediary. He pointed out that international remittance is estimated at half a trillion dollars annually and that just the computing power being used to secure the network via proof-of-work is now a multi-billion dollar market. Here’s an excerpt:
In Code We Trust: The trust system from the original cypherpunks decades ago was intended to reallocate an old system of centralized markets towards open source, secure (encryption) and meritocratic markets. This would be governed by code (Blockchain, consensus) and valued on utility (“token-omics” vs. economics). The former is designed to become a virtuous cycle, whereby successful tokens drive more users, more miners, and higher network value.
Janus Henderson‘s Paul O’Connor, head of the multi-asset team, disagrees. In a blog post published on the firm’s site yesterday, O’Connor said he sees no evidence of bitcoin as an emerging asset. “While it is very difficult to form a meaningful view of the medium-term potential of any individual cryptocurrency, the combination of parabolic price moves, high retail participation, and leverage mean that when the next bitcoin dip arrives, it has the potential to become a hair-raising affair,” O’Connor said.
For every skeptic warning about the bubble in crypto, a supporter seems to spring up in his place.
Michael Novogratz, head of Galaxy Investment Partners, temporarily suspended plans to launch what could have been the largest crypto fund last month, citing undesirable market conditions. Yet, here is Thiel, who serves on President Donald Trump‘s technology advisory council and is well-known for making early bets on companies like Facebook (FB), talking about bitcoin’s potential if it turns out to be “the cyber equivalent of gold.”