Founders Fund, a venture capital firm established by billionaire Peter Thiel, is once again showing its confidence in cryptocurrencies by investing in bitcoin and ether. This decision marks a significant resurgence of interest from Silicon Valley in the crypto markets. According to sources familiar with the matter, the firm allocated $200 million towards purchasing these digital tokens during the late summer to early fall of the previous year. This investment was evenly split between bitcoin and ether, the two most prominent cryptocurrencies.
A Sign of Institutional Investors Returning to Crypto
This strategic move by Founders Fund, which had not been disclosed before, highlights a broader trend of institutional investors dipping back into cryptocurrency investments. After the crypto market experienced a significant downturn in 2022, marked by the collapse of major players like the FTX exchange, this re-entry signals a potential recovery phase for the crypto industry. Despite the challenges faced in 2022, including a regulatory crackdown and a steep decline in bitcoin prices to their lowest since 2020, the market is showing signs of revival.
The Rise in Bitcoin and Ether Prices
After hitting a low of nearly $15,000, bitcoin’s price has been on an upward trajectory, recently reaching $50,000 for the first time in over two years. However, it still remains below its peak of $69,000 seen in November 2021. Ether has also seen a gradual increase in value. This recovery comes after Founders Fund’s early and aggressive investment in bitcoin starting in 2014, which concluded with the firm liquidating its holdings before the 2022 crash, resulting in approximately $1.8 billion in returns.
Founders Fund’s Crypto Strategy and Leadership
Founders Fund has a history of making early investments in significant technology and innovation-driven companies, including SpaceX and Meta, with over $12 billion in assets under management. In April 2023, the firm reinforced its commitment to the crypto sector by appointing Joey Krug as a partner focusing on crypto investments. Peter Thiel, co-founder of PayPal and Palantir, has been a vocal supporter of bitcoin, advocating for its value as a hedge against central bank policies and aligning with his libertarian views on technology and governance.
The venture capital firm’s recent investments in bitcoin and ether underscore a broader return of confidence in the cryptocurrency market, despite previous setbacks. With Founders Fund leading the way, the industry may be on the brink of a new era of institutional investment and growth.
