On Instant Pot, press Saute and wait until display says Hot. Add butter, onion, garlic and thyme; saute for about 5 minutes. Press Cancel.
Add potatoes, broth, salt and pepper. Close the lid, turn pressure vent to Sealing and press Pressure Cook on High or Manual for 5 minutes.
While soup is cooking, preheat large ceramic non-stick skillet on medium heat and cook bacon in batches until crispy. Transfer to a plate to cool off, then chop.
After Instant Pot has finished cooking, wait 3 minutes and release pressure using Quick Release method.
Open the lid, add milk and mash potatoes with a masher until desired consistency. You can also give just a few whirls with an immersion blender but do not overprocess.
Serve potato soup hot garnished with bacon bits, green onion and grated cheese.
Notes
Store: Refrigerate in an airtight container or right in the pot for up to 3 days.
Freeze: Freeze in a glass container or re-sealable silicone bags leaving room for expansion for up to 3 months. Thaw in the fridge overnight or on the counter for 6 hours.
Reheat: Reheat amount you will consume at that time by simmering on low heat in a pot. Shouldn't take more than 5-7 minutes. Add more broth or milk to thin out the soup, if necessary.
Do not overblend: If you decide to puree soup with an immersion blender, do not puree for too long as soup will become gluey mess within minutes.
Red or yellow potatoes: I do not recommend using red or yellow potatoes for the soup because they are too waxy.