Last Updated Dec 19, 2017 5:19 PM EST
Tyler and Cameron Winklevoss, twins who made a prescient $11 million investment in bitcoin, are reportedly now billionaires thanks to that 2013 bet. The brothers had first gained notoriety more than a decade ago when they unsuccessfully sued Facebook (FB) CEO Marc Zuckerberg for stealing the idea that became the world's largest social network.
It was the settlement from that earlier legal battle that funded their initial bitcoin investment. According to the UK's Telegraph newspaper, the identical twin Winklevosses are the first "bitcoin billionaires" because they purchased 100,000 bitcoins in 2013 when the digital currency's price reached a high of $1,000 in November of that year. Since then, Bitcoin has surged more than 1,700 percent, trading Tuesday at $17,362, according to Coindesk.
The brothers went on to be among the digital currency's most vocal proponents. They launched the Gemini exchange in 2016 and proposed an exchange-traded fund (ETF) backed by the price of bitcoin. Speaking to the Telegraph in 2016, Cameron Winklevoss proclaimed that he and his brother were long-term investors, and he noted that they haven't sold any of their stash of the cryptocurrency despite its meteoric price rise.
When bitcoin topped $11,000 on Nov. 29, users had difficulty accessing the Gemini website. Other exchanges had similar issues, including , the largest exchange for buying and selling bitcoin. A spokeswoman for Gemini didn't respond to an email seeking comment for this story. The brothers didn't comment for the most recent Telegraph story either.
Earlier this year, the Securities and Exchange Commission rejected the brothers' request to launch the bitcoin ETF on the grounds that the unregulated cryptocurrency market is prone to manipulation. Regulators continue to be concerned.
The SEC today obtained a court order to halt an initial coin offering (ICO) that a Canadian man named Dominic Lacroix claimed would provide investors a 13-fold profit in less than a month. ICOs are initial sales of cryptocurrencies, similar to initial public offerings for stocks.
Bitcoin enthusiasts are expecting the launch of futures tied to the price of bitcoin to cool the market's occasional wild price swings. CBOE Global plans to trade bitcoin contracts starting on Sunday. A week later, rival CME Group plans to enter the market. According to Axios, more than 100 hedge funds specializing in cryptocurrencies have launched this year.
Critics continue to argue that the market for bitcoin and the more than 1,300 other cryptocurrencies is an overheated bubble that's bound to pop. Fans counter that digital money is superior to the usual kind because it isn't under the control of a central bank, like the Federal Reserve, and can be traded more easily since it's divisible up to eight decimal points.
Some observers may quibble with Telegraph's first "bitcoin billionaire" claims -- the anonymous creator of bitcoin, Satoshi Nakomoto, is thought to have holdings worth more than $19 billion. Still, market observers say the twins deserve credit for sticking with the currency despite its many travails.
"The Winklevoss twins are not the first bitcoin billionaires, but simply the ones with the biggest PR and media outreach, which cements their position as forward-thinking pioneers, and as a result, it will definitely encourage more people to buy bitcoin," said Angel Versetti, co-founder and CEO of Ambrosus, which uses so-called blockchain technology used in bitcoin to check the quality of medicine and other products.
Indeed, bitcoin's growth is extraordinary, with a market capitalization approaching nealry $293 billion, according to Coinmarketcap. Among blue-chip stocks now valued at far less than that are iconic burger chain McDonald's (MCD) at $138 billion, investment bank Morgan Stanley (MS) at $95 billion and retailer Target (TGT) at $34 billion. Bolivia's GDP last year was $79 billion.