In 2014 the US Marshall Service began a series of auctions to off-load 144,336 Bitcoin seized after the FBI shut down the Silk Road black market website. Among the shrewd bidders was Tim Draper.
The venture capitalist bought 29,656 Bitcoin from the Marshall Service for an estimated US$18m. The same amount of Bitcoin would now be worth around US$118m.
But Draper doesn’t believe the ideal time for Bitcoin investing has passed, in fact he currently has more confidence in Bitcoin than Dollars.
“What it is (Bitcoin) is the future of currency and the currency is going to be decentralised and open and you’re going to end up with a much more fluid, dynamic currency if you own Bitcoin, than if you own dollars,” he says.
In the short term, however, he warns investors should not get caught up on price fluctuations.
“I never make Bitcoin predictions in the short term because short term anything can happen.
“It (Bitcoin) will move up and down and if you’re investing in the short term you’re making a mistake.
“People can manipulate the price, it moves up, moves down depending on big customers coming in to buy or big owners coming in to sell.
“Sometimes Bitcoin is going to feel very valuable … and sometimes you’re going to feel like dollars are what you really want to hold on to.
“When you feel like dollars are what you really want to hold on to, you probably want to buy Bitcoin.”
Draper’s advice came on a rare Facebook live Q&A session he held today.
The DFJ Venture Capital founder made headlines in April last year when predicting the price of a Bitcoin would reach US$250,000 by 2022 – a prediction he still stands by today.