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According to reports, billionaire Peter Thiel's venture capital firm, Founders Fund, is reinvesting in Bitcoin and Ethereum.
This move by the San Francisco-based venture capital company signals a renewed interest in the cryptocurrency market in Silicon Valley. As of 2023, the company manages approximately $12 billion in total assets.
Cryptocurrency Resurgence in Silicon Valley
According to sources familiar with the matter reported by Reuters, Founders Fund has invested $200 million over the past year to purchase crypto assets, evenly distributing the amount between the two largest assets—Bitcoin and Ethereum. The latest move highlights institutional investors' return to cryptocurrency investments, a strategy that was severely impacted during the market downturn of 2022.
Founders Fund was one of the earliest institutional supporters of cryptocurrency assets. In fact, the company purchased Bitcoin worth less than $1,000 nearly a decade ago. Over the following years, it expanded its holdings of Bitcoin.
Thiel reiterated his support for Bitcoin during his speech at the 2022 Bitcoin conference in Miami and urged for wider acceptance of Bitcoin. He boldly declared the end of the fiat game system while emphasizing that Bitcoin is still undervalued but has the potential to replace gold. Additionally, Thiel predicted that the price of Bitcoin would increase by 100 times from the then $44,000 price.
Despite Thiel's fund being optimistic about the future of Bitcoin, it strategically exited most of its cryptocurrency positions before the market downturn, due to significant challenges such as the collapse of major players like FTX and increased regulatory scrutiny.
By doing so, Founders Fund made a profit of $1.8 billion, just as Bitcoin continued to plummet, briefly dropping below $16,000 later that year. Interestingly, just a few months before Founders Fund divested its digital asset investments, Thiel expressed feelings of "underinvestment" in Bitcoin.
On the other hand, as Bitcoin makes a comeback, the inflow of funds into recently launched spot Bitcoin ETFs has been steadily increasing, propelling Bitcoin to levels not seen in the past two years.
Bitcoin Remains the Preferred Choice for Institutional Traders
A recent study conducted by Bybit indicates that institutional traders exhibit a clear bias towards Bitcoin, mixed sentiment towards Ethereum, and cautiousness towards alternative coins. Bitcoin holdings among this group have surged significantly, doubling in the first three quarters of 2023.
September was a crucial moment, with half of institutional traders' portfolios allocated to Bitcoin. This aligns with the optimistic sentiment in the market towards the leading cryptocurrency, driven by expectations of regulatory progress and the potential green light for Bitcoin ETFs. |
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Post time 20-2-2024 23:08:37
