Coinbase investor Fred Wilson said bitcoin could be a ‘fantasy’ when he first invested in 2013.

  • Fred Wilson once described bitcoin as science fiction – then invested $2.5 million in Coinbase.
  • Eight years after, Wilson became the company’s most profitable exit, selling the equivalent of $1.8 billion, Bloomberg reported.
  • Wilson, a legendary venture capitalist, was one of the early investors in Twitter, Tumblr, Zynga, and Etsy.

Union Square Ventures co-founder Fred Wilson once described bitcoin as science fiction – then invested $2.5 million in Coinbase Global. Eight years after, the legendary venture capitalist became the company’s most profitable exit investor.

While Coinbase, the largest cryptocurrency exchange in the US, had a volatile first trading day when it listed on the Nasdaq in April, it boasted a valuation on a fully diluted basis of about $86 billion by the end of the day.

The direct listing opened at $381 per share before hitting an intraday high of $429.54, which was 13% above its opening price. The stock then reversed course and traded as low as $310.

By the end of the first day, the stake of Wilson’s venture capital firm skyrocketed 10-fold to $4.6 billion – or 1,840 times its initial investment.

Also at the end of Coinbase’s first trading day, Union Square Ventures sold 4.7 million shares for $1.8 billion, according to a securities filing first viewed by Bloomberg.

But Wilson wasn’t always so optimistic on bitcoin’s prospects. At a May 2013 conference, Wilson referred to the then-rising cryptocurrency as a “fantasy,” as first reported by Bloomberg.

“It’s straight out of a sci-fi novel, but sci-fi novels are the best things you can read if you want to invest,” Wilson said. “It’s a gut bet.”

Shortly after, he invested in Coinbase and outlined his thoughts in a 2013 blog post. He expounded on why he believed in Coinbase as a company, including three important features: an online wallet, a merchant platform, and a service.

“We believe that bitcoin represents something fundamental and powerful, an open and distributed internet peer to peer protocol for transferring purchasing power,” he said in the post. Coinbase wasn’t his first foray into the digital asset space. Wilson’s New York-based firm has invested in more than 100 businesses and has exited 10 since the firm was founded in 2003, Bloomberg reported.

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