Peter Thiel’s Founders Fund invests $200 million in cryptocurrencies

New crypto investments: Venture capital firm Founders Fund, established by billionaire Peter Thiel, is once again investing heavily in cryptocurrencies, according to sources familiar with the matter. The firm, based in Silicon Valley, has reportedly invested $200 million in crypto tokens, split evenly between Bitcoin and Ether, the two largest cryptocurrencies.

This move, previously undisclosed, highlights a resurgence of interest among institutional investors in token investments, a strategy that was once highly coveted before the crypto market experienced a downturn in 2022. The investment indicates a renewed confidence in crypto markets, which faced challenges following the collapse of major players like crypto exchange FTX in 2022, leading to price declines and increased regulatory scrutiny.

Bitcoin experienced a significant drop in price during 2022, reaching nearly $15,000, its lowest point since 2020. However, both Bitcoin and Ether have seen gradual price increases over the past year. Bitcoin recently surpassed $50,000 for the first time in over two years, although it remains below its peak of $69,000 in November 2021.

Founders Fund has a history of involvement in crypto, having initially invested in Bitcoin as early as 2014. The firm liquidated its holdings before the 2022 market crash, generating approximately $1.8 billion in returns. Last summer, Founders Fund resumed its crypto acquisitions, starting with Bitcoin below $30,000 and gradually increasing its holdings over several months. The average purchase price of these acquisitions was not disclosed.

Peter Thiel, renowned for co-founding PayPal and Palantir, has publicly endorsed Bitcoin, likening it to gold as a store of value and a hedge against central bank policies. Thiel's support for cryptocurrencies aligns with his libertarian views and interest in technological innovation.

Founders Fund, recognised for its early investments in companies like SpaceX and Meta, currently manages over $12 billion in assets. The firm expanded its focus on crypto investing by appointing Joey Krug as a partner in April 2023. A spokesperson for Founders Fund declined to comment on the recent investments.

(With Reuters inputs)