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Bitcoin rises after report says early Facebook investor Peter Thiel is buying massive amounts

Founders Fund, run by Peter Thiel, a PayPal co-founder and early Facebook investor, has bought millions of dollars in bitcoin, The Wall Street Journal reported Tuesday, citing sources familiar with the situation.

Bitcoin rose more than 11 percent to trade near $14,711, according to Coinbase, amid the report.

The venture capital firm bought about $15 million to $20 million of bitcoin, and told investors that after bitcoin's surge in the last year, those holdings are worth hundreds of millions of dollars, the newspaper said. It wasn't clear whether Founders had sold any of its holdings, the report said.

Founders did not immediately respond to a CNBC request for comment.

Bitcoin's performance in the hour around the report

Source: Coinbase

At a conference in late October, Thiel said people are "underestimating" bitcoin and compared the digital currency to gold. "If bitcoin ends up being the cyber-equivalent of gold it has a great potential left," he said.

Venture capitalist Tim Draper bought nearly 30,000 bitcoins in a 2014 U.S. Marshals Service auction. Draper confirmed to CNBC in early December that he is still holding all those coins.

Read the full Journal report here.