One of bitcoin's biggest backers, billionaire venture capitalist TimDraper, recently wagered about US$400,000 that the digital currencywill rebound from its recent plunge.

Draper, who co-founded investment firm Draper Fisher Jurvetson,said in an email that he bought 2,000 bitcoins for “around $200”last week. Draper, one of the biggest buyers in U.S. governmentauctions of bitcoin last year, is betting that the virtual currencywill bounce back after prices dropped 70 percent in the pastyear.

Bitcoin's price dipped by more than 30 percent in two days thismonth, to below $200. Skeptics were already questioning thecurrency's future amid increasing regulatory oversight and after bitcoin's slide had made it oneof the biggest money-losing investments of 2014, worse than oil orthe ruble. Bitcoin was valued at about $272 on Monday, comparedwith more than $1,100 in late 2013, according to CoinDesk BitcoinPrice Index.

Draper bought about 32,000 bitcoins at government auctions lastyear. He's been investing them in various startups building onbitcoin technology, which can be used to facilitate cheapinternational money transfers or buy assets like gold. While hedidn't specify the price paid in either auction, bitcoin was valuedon the market at more than $600 at the time of the Juneauction.

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