San Francisco: Founders Fund, the venture capital firm founded by billionaire Peter Thiel, is investing once again in bitcoin and ether, sources said, signalling Silicon Valley’s renewed interest in cryptocurrency markets.
From late summer to early fall last year, the fund invested US$200mil to acquire crypto tokens, half in bitcoin and the other half in ether, the two largest cryptocurrencies, two sources with direct knowledge of the matter told Reuters.
The previously unreported move by the prominent Silicon Valley venture capital firm underscores some institutional investors’ return to token investments, once the hottest investment strategy before the crypto market crashed in 2022.
The outsized bet marks a comeback for crypto markets, which suffered in 2022 after the collapse of crypto exchange FTX and other big players crushed prices, tarnished the industry and prompted a regulatory crackdown.
In 2022, the price of bitcoin crashed to nearly US$15,000, its lowest price since 2020. Bitcoin and ether prices have gradually climbed over the past year, with bitcoin hitting US$50,000 for the first time in more than two years this week, but still below its peak of US$69,000 in November 2021.
As one of the earliest institutional investors in crypto, Founders Fund began aggressively buying bitcoin in 2014, but then liquidated it before the crypto market crashed in 2022, making about US$1.8bil in returns.
Last summer, Founder’s Fund started to acquire bitcoin when it was below US$30,000, and purchased more bitcoin and ether over a few months, sources added. — Reuters
