Melt 2 tablespoons of the butter in a saucepan over medium low heat and add in the peppers. Cook slowly until the peppers have become soft. Remove from heat. Cool in pan.
Puree the mixture in a food processor, and process until smooth. Add in the remaining 1/2 cup of butter, and season to taste with salt and pepper. Process until smooth, scraping down the sides as needed.
Press the pepper mixture through a fine sieve into a serving dish (if using a table spread) or into a mixing bowl. Let sit, covered, for an hour to infuse flavors before serving.
If making ahead of time, let the butter come to room temperature before serving.