When Bitcoin (CRYPTO:BTC) charged back onto the scene late in 2020, it was driven in large part by a new breed of retail traders. Coinbase Global (NASDAQ:COIN)grew in popularity, Square (NYSE:SQ)added Bitcoin trading, and even Tesla (NASDAQ:TSLA) began accepting Bitcoin for vehicle orders.
There are plenty of stories of small investors making hundreds of thousands of dollars, and even millions, in Bitcoin. But some of the really big money is being made by investors who were already extremely rich and got into Bitcoin before most people ever heard of it. And they continue to tout Bitcoin (called "talking their own book"). Here are some of the billionaires making even more billions with Bitcoin.
Image source: Getty Images.
Going back to the early days of Bitcoin, it was the technology that caught a lot of early investors' attention. Whether they saw Bitcoin as a way to store value in a digital form rather than gold (Peter Thiel), or whether they saw it as a better transaction technology, big names in Silicon Valley and Wall Street were early investors.
Notable mentions in the early Bitcoin investor network are Peter Thiel; Dan Morehead of Pantera Capital; and Michael Novogratz, formerly of Fortress Investment Group. These were already successful and already very wealthy investors making even more money off Bitcoin.
As much money as Bitcoin is making for early investors directly, the companies behind Bitcoin, other cryptocurrencies, and the blockchain could make them even more money. And once again, it's not retail investors who are getting rich, it's wealthy venture capitalists making billions on crypto investments.
Venture capital firm Andreessen Horowitz invested in Coinbase's $25 million Series B funding round. According to an analysis done by CNBC, that round returned 381 times the initial investment at its Nasdaq debut price. Andreessen Horowitz had a $9.7 billion stake in the company, and that's not all it's investing in crypto. The firm has invested in over two dozen crypto-related start-ups and recently launched the $2.2 billion Crypto Fund III.
Founders Fund, a venture capital firm run by Thiel, has invested in companies like Bullish, which just agreed to a $9 billion SPAC deal, and BitDAO with its recent $230 million financing round, along with investing in Bitcoin itself.
Michael Saylor has quickly turned MicroStrategy (NASDAQ:MSTR) into a bet on Bitcoin with the firm now holding over 105,000 tokens. Saylor has been one of the most vocal Bitcoin backers in 2021.
Here are some of the other notable venture capital investments in crypto start-ups that could net billions more in profits:
There's a lot of money going into cryptocurrencies and the infrastructure surrounding them. And the big-money investors got in before most of us had heard of crypto.
Building a Bitcoin mining rig. Image source: Getty Images.
Small investors should know what they're getting into with cryptocurrencies like Bitcoin. For better or worse, billionaires got their first, and they're likely to make moves that will protect their wealth in the crypto space. Here are some factors to keep in mind:
Whether you're a Bitcoin bull or bear, this will be an interesting space to watch over the next decade. There are billions of dollars at stake, and some of the biggest names in investing will have a lot to say about the industry's future.
This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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Billionaires Have a Lot Riding on Bitcoin's Future - Motley Fool
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