Venture Capital Firm Founders Fund Re-Enters Crypto Market with $200 Million Investment
Silicon Valley-based venture capital firm Founders Fund, co-founded by billionaire Peter Thiel, has made a major move back into the cryptocurrency market, signaling renewed interest in digital assets within the tech hub. According to sources familiar with the matter, the fund allocated a substantial $200 million towards crypto tokens between late summer and early fall last year, evenly split between Bitcoin and Ether, the leading cryptocurrencies.
This foray into the crypto space by Founders Fund highlights a resurgence in institutional interest in token investments, which had waned following the market crash in 2022. The $200 million investment represents a rebound for the crypto markets, which faced challenges in the aftermath of the collapse of major players like FTX exchange. Price declines and regulatory scrutiny had cast a shadow on the industry, with Bitcoin hitting a low of nearly $15,000, its lowest level since 2020.
However, both Bitcoin and Ether 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 positive momentum, it remains below its peak of $69,000 in November 2021.
Notably, Founders Fund has been a pioneer in institutional crypto investment, initially acquiring Bitcoin in 2014. Although it liquidated its holdings before the 2022 crash, the firm re-entered the market last summer, taking advantage of lower prices below $30,000. The exact average purchase price remains undisclosed.
While a spokesperson for the fund did not comment on the recent investment, Peter Thiel has been a vocal advocate for Bitcoin, publicly endorsing it as a decentralized store of value similar to gold and a hedge against traditional monetary policies. Thiel’s support aligns with his interests in libertarianism, limited government intervention, and technological innovation.
Founders Fund, known for early investments in successful companies like SpaceX and Meta, currently manages assets exceeding $12 billion. The firm further solidified its commitment to crypto investing by appointing Joey Krug as a partner in April 2023, with a particular focus on this rapidly growing sector.
The re-entry of Founders Fund into the crypto market with a substantial investment is a positive sign for the industry and underscores the increasing institutional interest in digital assets. As crypto prices rebound and regulatory environments evolve, the involvement of big players like Founders Fund adds credibility and further drives the mainstream adoption of cryptocurrencies.
Analyst comment
Positive news: The re-entry of Founders Fund into the crypto market with a substantial investment is a positive sign for the industry and underscores the increasing institutional interest in digital assets. As crypto prices rebound and regulatory environments evolve, the involvement of big players like Founders Fund adds credibility and further drives the mainstream adoption of cryptocurrencies.
