Sources have revealed that Founders Fund, the venture capital firm established by billionaire Peter Thiel, is once again allocating investments into bitcoin and ether, indicating a resurgence of interest in cryptocurrency markets within Silicon Valley. Between late summer and early fall of the previous year, the fund directed $200 million towards acquiring crypto tokens, with an even split between bitcoin and ether, as disclosed by two individuals familiar with the situation to Reuters.
The recent undisclosed action taken by a notable venture capital firm in Silicon Valley highlights a resurgence in token investments among certain institutional investors. This trend was once the most sought-after investment strategy until the crypto market plummeted in 2022. This significant investment signals a revival for crypto markets, which faced adversity in 2022 following the collapse of major players like the crypto exchange FTX. The resulting price declines, industry reputation damage, and regulatory scrutiny had cast a shadow over the crypto industry.
In 2022, Bitcoin experienced a significant downturn, dropping to nearly $15,000, marking its lowest value since 2020. Over the past year, both Bitcoin and Ether prices have been on a gradual ascent, with Bitcoin recently surpassing $50,000 for the first time in over two years. However, it remains below its peak of $69,000 reached in November 2021. Founders Fund, one of the earliest institutional investors in cryptocurrency, took an aggressive stance in buying Bitcoin starting from 2014. However, they opted to liquidate their holdings before the 2022 crypto market crash, yielding approximately $1.8 billion in returns.
Last summer, Founder’s Fund initiated the acquisition of bitcoin when its value was below $30,000 and continued to purchase more bitcoin and ether over several months, according to sources. The average price of these acquisitions remains undisclosed, as Reuters was unable to ascertain it. A spokesperson for the fund declined to provide further comment.
Thiel, a co-founder of PayPal and Palantir, has publicly endorsed bitcoin, describing it as a decentralized currency rooted in blockchain technology, operating independently from central banks. He views it as a store of value comparable to gold and a safeguard against the monetary policies of central banks. Thiel’s enthusiasm for cryptocurrency resonates with his libertarian beliefs, advocacy for small government, and interest in technological innovation. Founder’s Fund, recognized for its early investments in companies like SpaceX and Meta, currently manages over $12 billion in assets. In April 2023, it appointed Joey Krug as a partner with a focus on crypto investments.
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