Peter Thiel's VC Firm Re-Enters Crypto, Allocates $200 Million: Report

Founders Fund's re-emergence in the crypto space highlights a resurgence in institutional interest in token investments, which had waned following the market crash in 2022.

Peter Thiel is the co-founder of PayPal, Palantir Technologies, and Founders Fund.

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Venture capital firm Founders Fund, co-founded by billionaire Peter Thiel, has reportedly re-entered the cryptocurrency market, demonstrating a renewed enthusiasm for digital assets within Silicon Valley. As reported by Reuters, sources familiar with the matter revealed that the fund allocated $200 million toward crypto tokens between late summer and early fall last year. This investment was split evenly between Bitcoin and Ether, the two leading cryptocurrencies.

Founders Fund's re-emergence in the crypto space highlights a resurgence in institutional interest in token investments, which had waned following the market crash in 2022.

Crypto Rebound

The significant investment represents a rebound for crypto markets, which faced challenges in 2022 following the collapse of major players like FTX exchange, resulting in price declines and regulatory scrutiny. Notably, the price of bitcoin plummeted to nearly $15,000, its lowest level since 2020.

However, both bitcoin and ether prices have shown signs of recovery over the past year, with bitcoin recently surpassing the $50,000 mark for the first time in over two years. Despite this, it remains below its peak of $69,000 in November 2021.

Founders Fund, a pioneer in institutional crypto investment, initially began acquiring bitcoin in 2014. Although it liquidated its holdings before the 2022 crash, the firm re-entered the market last summer, acquiring bitcoin when prices were below $30,000. The exact average purchase price remains undisclosed.

While a spokesperson for the fund declined to comment on the recent investment, Thiel, known for co-founding PayPal and Palantir, has publicly endorsed Bitcoin, citing its status as a decentralized store of value akin to gold and a hedge against traditional monetary policies. This aligns with Thiel's interests in libertarianism, limited government intervention, and technological innovation.

Founders Fund, renowned for its early investments in companies like SpaceX and Meta, currently manages assets exceeding $12 billion. The firm reinforced its commitment to crypto investing by appointing Joey Krug as a partner in April 2023, focusing specifically on this burgeoning sector.

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