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Highlights
- The fund started accumulating Bitcoin in mid-2023 when it was trading under $30,000.
- Peter Thiel sees Bitcoin as a safe haven against central bank policies.
- Founders Fund has been accumulating Bitcoins over the past decade since 2014.
Institutional investments in Bitcoin (BTC) and Ethereum (ETH) have been soaring over the past few months! A recent Reuters report suggests that Peter Thiel-backed Founders Fund invested a hefty $200 million in these two cryptocurrencies in late summer 2023. Also, the fund has reportedly split its $200 million investment into equal amounts in BTC and ETH.
Founders Fund Re-entry Into Bitcoin Market
As per sources familiar with the matter, the Founders Fund started acquiring Bitcoins last summer when it was trading under $30,000. However, this was not the first time that the fund was making a bet on the largest cryptocurrency.
Founders Fund, a notable institutional investor in the crypto space, embarked on an aggressive acquisition of Bitcoin as early as 2014. However, the firm opted to liquidate its holdings prior to the 2022 crypto market crash, resulting in approximately $1.8 billion in returns, reports Reuters.
This previously undisclosed action by the esteemed Silicon Valley venture capital firm highlights a resurgence in token investments among institutional investors. Many funds that sought an exit after the crypto market crash of 2022, are now making fresh entries.
In 2022, the price of Bitcoin plummeted to nearly $15,000, marking its lowest value since 2020. Despite this setback, both Bitcoin and Ether prices have steadily rebounded over the past year, culminating in Bitcoin surpassing the $50,000 milestone for the first time in over two years. However, it still trades under the all-time high levels of $69,000, back in 2021.
Peter Thiel And Crypto
PayPal co-founder Peter Thiel has publicly expressed admiration for Bitcoin, lauding it as a store of value akin to gold and a safeguard against the policies of central banks. Bitcoin’s foundation on blockchain technology, operating independently of traditional financial institutions, resonates with Thiel’s interests in libertarianism, limited government, and technological progress.
This affinity for cryptocurrency dovetails with Thiel’s broader investment philosophy. Founders Fund, renowned for its early support of companies like SpaceX and Meta, now manages assets exceeding $12 billion. In a strategic move reflecting the growing importance of crypto assets, the fund welcomed Joey Krug as a partner in April 2023, specifically tasked with overseeing crypto investments.
Now with the arrival of spot Bitcoin ETFs last month, the institutional inflows into Bitcoin have surged significantly. A spot Ethereum ETF is also likely to arrive by May 2023 which could lead to more institutional participation going ahead.
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