The rise of cryptocurrency has heralded perhaps the most decisive shift in the history of modern civilization after the industrial revolution, and 7 Largest Well Known Bitcoin Investors In The World have been on top of it.
Bitcoin, the primary peer-to-peer digital currency, is breaking all barriers and is on the verge of gaining worldwide acceptance, as more and more stores, retail companies and businesses are starting to accept the cryptocurrency as a valid payment method. Almost every Wall Street juggernaut has been impressed with the pace with which Bitcoin is gaining acceptance and see it as a legitimate and even necessary investment.
But this change was impending, and the need for a decentralized digital currency was felt immediately after the dot-com boom in the 1990s. American economist and Nobel prize winner Milton Friedman presciently predicted the rise of cryptocurrency back then, when he said:
“One thing that’s missing, but that will soon be developed, is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B, without A knowing B or B knowing A.”
Bitcoin has crossed the $4,000 mark and several analysts think that the meteoric rise of the currency will only continue. Goldman Sachs’ head of technical strategy Sheba Jafari said in July that Bitcoin investors should be “patient” as the digital currency would be headed to the $3,600 mark, which it indeed did (and passed easily). In May, the Bitcoin community reached a historic consensus in a conference in New York, which will result in faster transactions and increased capacity. According to the deal, Bitcoin’s block size limit will be doubled to 2MB. Previously, the hard-coded limit of 1MB per blockchain block prevented the network from processing more than about seven transactions per second. An increased block size removes one of the main hurdles in the growth and mass use of Bitcoin.
Not everyone has been on the Bitcoin bandwagon however. Warren Buffett was a notable detractor of the currency, calling it a “mirage” and saying that the idea that the currency had some meaningful intrinsic value was “a joke”. Bitcoin proponent Marc Andreessen (more on him later) countered Buffett’s rant by claiming that history is littered with old men crapping on new technology that they don’t understand.
It’s important to understand Bitcoin’s prominence not just in the sense of whether you’ll invest in it or use it, but also as it relates to other investments, like Paypal Holdings Inc (NASDAQ:PYPL) and The Western Union Company (NYSE:WU), which will be greatly affected by a new, cheaper way for people to send money to each other or pay for goods or services. Western Union has shown signs that it may be looking at allowing Bitcoin transfers itself in response, though its margins would likely be extremely low on any such transactions.
For a list of prominent sites where you can use the cryptocurrency, don’t miss our list of 17 Companies That Accept Bitcoin.
Given its bright growth prospects, famous investors (aside from Mr. Buffett) are now betting on Bitcoin openly. Check out the list of the 7 largest well known Bitcoin investors in the world, beginning on the next page.
Tim Draper is perhaps the biggest Bitcoin enthusiast in the investor community in the US. The 59-year-old billionaire, who is the founder of Draper Fisher Jurvetson and Draper Associates, rose to prominence in 2014 when he won the auction conducted by the US Marshals Service to sell the seized Bitcoins from the banned marketplace Silk Road. Draper took home all 30,000 Bitcoins from the auction. The price of a Bitcoin at that time was $645 apiece. Today, one Bitcoin is worth over $4,000. According to an estimate, Draper had made over $16 million from the Bitcoin industry so far, and that was well before the currency’s recent meteoric rise.
In an interview in May, Draper revealed his plans to acquire Tezos, a new blockchain platform. Tezos launched its initial coin offering (ICO) in May and raised $232 million worth of bitcoin (BTC) and ether (ETH) coins. Earlier this month, Draper acquired a 10% stake in Credo, a cryptocurrency startup that wants to solve the problem of email spamming in an innovative way.
Cameron Winklevoss and Tyler Winklevoss
The Winklevoss twins, who came into the limelight in 2004 when they sued Mark Zuckerberg, alleging that the Facebook founder stole the idea of the social platform from their website “ConnectU”, are big fans of Bitcoin. The brothers, who are famous internet entrepreneurs and venture capitalists, claimed in 2013 that they owned about 1% of all the bitcoins that existed in the world at that time. In March, the Securities and Exchange Commission denied a permit to allow Cameron and Tyler to start a Bitcoin ETF. In 2016, Tyler Winklevoss said in an interview that Bitcoin is “better than gold.” Tyler also said in the interview that Bitcoin was the “greatest social network of all.” In 2015, the twins also launched Gemini, one of the first regulated and licensed digital currency exchanges.
Venture capitalist Barry Silbert has been actively investing in cryptocurrency over the last few years. In December 2014, Barry Silbert’s SecondMarket won 48,000 bitcoins in the second round of the US Marshals auction of 50,000 Bitcoins. The price of a bitcoin at the time of the auction was just $350. You can do the math and imagine how much profit the investor has amassed by now. SecondMarket was founded by Silbert in 2004. He is now the CEO of venture capital firm Digital Currency Group. Silbert has actively worked for famous cryptocurrency names in the past, including Coinbase, BitPay, and Ripple.
Next up on the list of the 7 largest well known Bitcoin investors in the world is Charlie Shrem, who has gone through a number of crises and scandals. As a pioneer in the Bitcoin world, Shrem started investing in Bitcoin as a college senior in 2011. Frustrated over the lengthy process to buy and sell bitcoins, Shrem launched BitInstant, a user-friendly platform that let people buy and sell bitcoins. BitInstant received $125,000 from angel investor Roger Ver and a whopping $1.5 million from a group of investors led by the Winklevoss brothers. Shrem was also a board member of the Bitcoin Foundation.
The 27-year entrepreneur was arrested at the JFK airport on January 26, 2014 on charges of laundering $1 million worth of bitcoins to help users of the illegal online marketplace Silk Road. After his release, Shrem started active investments and partnerships in the Bitcoin world again. In 2016, he launched Intellisys, a private equity investment portfolio in which tokens representing shares in a portfolio of “middle market companies” are issued on the ethereum blockchain.
Famous investor and internet entrepreneur Marc Lowell Andreessen is one of the biggest proponents of Bitcoin in the US. The man behind two of the earliest web browsers, NetScape and Mosaic, said in an interview in 2014 that in 20 years, we will talk about Bitcoin like we talk about the internet today. Andreessen contends that very soon, law enforcement and intelligence agencies will become pro-Bitcoin, and libertarians will start opposing cryptocurrencies.
The 46-year-old investor’s capital firm Andreessen Horowitz has invested over $227 million in bitcoin-related startups as of July 2015. Two of the notable bitcoin startups in which Andreessen has invested are a bitcoin wallet company called Coinable, and TradeBlock, a bitcoin-related financial services company. In a historic piece published in the New York Times in 2014, Andreessen claimed that Bitcoin is a breakthrough in computer science, and the first practical solution to the perennial problem in the field of computer science known as the “Byzantine Generals Problem.”
Hedge fund manager and billionaire Mike Novogratz is a notable name among the 7 Largest well known Bitcoin investors in the world. The former boss of investment firm Fortress Investment Group said in April that 10% of his wealth was invested in the Bitcoin industry. Novogratz said that this is the “best investment” of his life. Novogratz correctly predicted in 2013 that bitcoin would soar, and remembers people laughing at him about that prediction. However, the billionaire recommends diversification while investing in the Bitcoin industry. He says that he bought Ether when it was trading for about $1; it’s worth over $300 today. In June, Novogratz once again reiterated his unfazed trust in cryptocurrency, and claimed that the industry could be worth over $5 trillion in the next five years.
Venture capitalist Chamath Palihapitiya is perhaps the most vehement supporter of bitcoin and cryptocurrencies in general. In 2013, the former Facebook executive, who is also an owner and board member of the Golden State Warriors, revealed that he owned $5 million worth of Bitcoins, and said that he wanted to invest a further $10 million to $15 million in the Bitcoin industry. That same year, Chamath wrote an article for Bloomberg titled “Why I Invested in Bitcoin”, making a long case for the cryptocurrency and criticizing the conventional banking system. In June, Chamath replugged this article on his Twitter page and said that he is now “convinced” that Bitcoin’s value will exceed that of gold. Chamath believes that Bitcoin provides a way to bypass the monopoly held by major banks and financial institutions, which he thinks are running an “autocracy.”
That concludes the list of the 7 Largest Well Known Bitcoin Investors In The World. Were you lucky enough to invest in Bitcoin before its meteoric ascent? Let our readers know your thoughts or stories related to the currency in the comments.