03 January 2018
Bitcoin prices climbed on Wednesday after The Wall Street Journal reported that Founders Fund, run by Peter Thiel, a PayPal co-founder and early investor in Facebook, has bought millions of dollars of the volatile cryptocurrency.
Bitcoin was trading at $14,766.00 by 06:32 AM ET (11:32 AM GMT) on the Bitfinex exchange, after rising as high as $15,428.00 earlier.
The venture capital firm bought around $15 million to $20 million in bitcoin and has told investors that those holdings are now worth hundreds of millions of dollars following bitcoin’s price surge in 2017, the Journal reported.
In October, Thiel said people were “underestimating” bitcoin and compared the digital currency to gold.
“If bitcoin ends up being the cyber-equivalent of gold it has a great potential left,” he said.
The digital currency had risen around twentyfold since the start of 2017, climbing from less than $1,000 to as high as $19,891 on 17 December on Bitfinex and to more than $20,000 on other exchanges.
However, from its all-time high reached in mid-December, the price dropped by almost half over the rest of the month.
While bitcoin investors believe the decline was a natural correction after its breath-taking rally there have been warnings of an asset bubble from market regulators and central banks.
In late December, Morgan Sanley analysts warned that the real value of bitcoin could “be zero.”
Researchers noted that if bitcoin is not accepted as a rival to the U.S. dollar and other fiat currencies, then it is literally worth nothing.
On Tuesday bitcoin’s dominance of the cryptocurrency market fell to its lowest ever level amid growing interest in alternative digital currencies.
Bitcoin’s market capitalization was $231.7 billion, around 36% of the total value of all cryptocurrencies, its lowest ever market share. At the start of 2017, its market share stood at over 80%.
Meanwhile, Ripple, the second most valuable cryptocurrency by market cap after bitcoin, was trading at $2.373 on the Poloniex exchange after setting a fresh record high of $2.49 earlier.
Ripple’s market cap continued to climb on Wednesday, peaking at over $105 billion. Over the weekend, Ripple surpassed Ethereum to become the second largest digital currency after bitcoin.
Ripple rose in value by more than 32,000% over the course of 2017. It began the year trading at around $0.006 and ended at $1.98.
Ripple’s gains in 2017 outstripped the gains of Ethereum and bitcoin, which rose by roughly 9,000% and 1,400%, respectively.
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This article was originally published at Investing.com.