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Tim Draper Still Has $260 Million Worth of Bitcoin at $6,500 Price Point

In a recent, exclusive interview with The Street , billionaire investor Tim Draper stated that he stands by his $250,000 Bitcoin price target by 2022.

While the price of Bitcoin has declined by more than 65 percent since late 2017, the holdings of early Bitcoin investors remain relatively high against the U.S. dollar. Draper, who invested in Bitcoin in 2014, still has more than $260 million worth of Bitcoin, excluding his investments in other cryptocurrencies including Tezos .

How Draper Built His Bitcoin Portfolio

In early 2014, the price of Bitcoin was volatile in the $1 to $5 range. Draper stated that he acquired Bitcoin in small batches, starting from approximately $2, and bought his first large batch of Bitcoin when the U.S. Marshall’s Office seized funds from Silk Road operators and put it in an auction. Draper said:

“Small amounts, a little bit at a time. That price was about $2.50 and then it was starting to really rip and the U.S. Marshall’s Office confiscated the Silk Road money from Bitcoin. They put it up for auction. The bidders were all sort of venture capitalists and a couple of other people. They were all talking about what kind of a deal they were going to get.”

At the time, in late 2014, 12 lots featuring thousands of Bitcoins were auctioned off and venture capitalists were allowed to participate in the auction. Predicting Bitcoin would either go down to zero or up to many billions of dollars, Draper outbid everyone with $632, with over 5 percent in premium, and purchased all 12 lots.

“Here was my thinking: Either this thing goes to nothing and–you know, too bad–or it goes sky-high and nobody’s going to care that I paid 5 percent more for it. So I bid up to $632 and I didn’t just get one lot, I got all the lots. I think it was about 40,000 Bitcoins.”

The 40,000 Bitcoins Draper purchased in 2014 are now worth $260 million. Subtracting the initial $22.4 million investment Draper made, even after a 65 percent correction, Draper’s profit from his 2014 investment is $237.6 million.

However, he stated that in the long-term, cryptocurrencies as an asset class will grow faster and bigger than the internet. Similar to how the internet revolutionized information, communication, gaming and entertainment, crypto will change how finance used to work, according to Draper.

He emphasized that Bitcoin, the most dominant cryptocurrency in the market, will achieve $250,000 by 2022 and that the banking, insurance, commerce, real estate, medicine and healthcare industries will be largely impacted by the blockchain and smart contracts.

He added:

“This is the beginning of something that’s bigger than the internet ever was. The internet went after information, communication, gaming and entertainment. They are all $10 billion to $100 billion dollar industries–maybe [one or two are] trillion-dollar industries. Now the industry that this is going to change is finance. It encompasses commerce and banking and insurance and real estate. More broadly, medicine and healthcare are going to change because of smart contracts.”

$250,000 Bitcoin

Related: Billionaire Investor Tim Draper: ‘Bitcoin Will Reach $250,000’ and ‘Fiat is Doomed’

If Bitcoin achieves $250,000 within the next four years, the market cap will hover around $5.25 trillion. Considering that nearly 20 percent of Bitcoin are lost and not in circulation due to lost wallets and funds, that would place the market cap of Bitcoin closer to the $6 to $7 trillion region.

For Bitcoin to achieve that, it will need to take a considerable portion of the offshore banking market as a robust store of value, valued at over $30 trillion, while operating as a consensus currency.

With institutional investors planning to enter the market through crypto custodian solutions, in the long-term, it is possible that Bitcoin can evolve into a major store of value alongside gold to target large-scale investors in the offshore banking market.

The post Tim Draper Still Has $260 Million Worth of Bitcoin at $6,500 Price Point appeared first on CryptoSlate .

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