The price of Bitcoin increased by 13.5 per cent to US$15,017 ($21,187) after a report found billionaire Peter Thiel, an early investor in Facebook and co-founder of Paypal, had heavily invested in the cryptocurrency.

Thiel's venture capital firm, Founders Fund, bought around US$15 to US$20 million ($21.1m - $28.2m) in Bitcoin in mid-2017, the report said.

Bitcoin bought by Thiel's firm are now believed to be worth hundreds of millions after the currency's surge last year, according to the Daily Mail.

Most mainstream investors have not bought large sums of Bitcoin over fears about cybersecurity and liquidity.

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Launched in 2009, Bitcoin is a virtual currency created from computer code.

It and other virtual currencies use blockchain, which records transactions that are updated in real time on an online ledger and maintained by a network of computers.

The report by Wall Street Journal said the initial investment by the San Francisco based venture capital firm has increased by more than five times, citing people familiar with the issue.

Bitcoin reached US$15,017 ($21,187) since the article was published online yesterday, writes CNBC.

From 1 January to today Bitcoin has increased from US$13,354 ($18,844) to US$14,951 ($21,099).

It was not clear is founders have since sold any of their holdings.

In October, Thiel, who has a net worth of US$2.2 billion ($3.1b), said people are "underestimating" Bitcoin.

"If Bitcoin ends up being the cyber-equivalent of gold it has a great potential left," he said.

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Earlier today a top European Central Bank official called for governments to regulate and tax Bitcoin, labelling the cryptocurrency an object of speculation and a tool for money laundering.

"One ought to apply what the basic rule is in any other financial transaction: everyone involved should reveal their identity," ECB governing council member Ewald Nowotny told the German daily Sueddeutsche Zeitung.

"We need a value-added tax on Bitcoin, since it's not a currency," said Nowotny, who is head of Austria's central bank.

Nowotny's comments echo those by other ECB officials, who regard the Bitcoin's spectacular surge in value as a bubble, rather than a sign it could be a digital competitor to the euro single currency used by its 19 member nations.

Nevertheless, the "digital gold" is a concern for central bankers as it can allow money launderers to dodge around increasingly strict rules in the traditional financial system.

"It can't be allowed that we've just decided to stop printing 500-euro notes to fight money laundering, that we've slapped strict rules on every tiny savings club, and then have to watch people blithely laundering money around the globe with Bitcoin," Nowotny said.

Bitcoin is perhaps the best known and most popular virtual currency and its value surged as high as US$19,500 ($27,511) in December from around US$1,000 ($1,411) in January.

While blasting the cryptocurrency's bubble-like characteristics, Nowotny acknowledged the topic had "reached the heart of society," with people now asking him on the Vienna metro whether they should buy Bitcoin, rather than gold as in the past.

But "the central bank would only have to intervene if (Bitcoin) were to change people's behaviour. There are no signs of that yet," he said, noting that wild gyrations in Bitcoin's value and slow transaction speeds made it hard to use for everyday payments.