The Founders Fund, a venture capital fund co-founded by billionaire Peter Thiel, exited a nearly eight-year gamble on cryptocurrencies just before the market crashed last year, earning $1.8 billion in profits.
According to a Financial Times report, the San Francisco-based fund made its first cryptocurrency investment in 2014, investing huge sums in the flagship cryptocurrency Bitcoin ($BTC) before it reached $1,000 per coin. According to the study, almost two-thirds of its total investment was in $BTC.
The fund apparently sold the majority of its cryptocurrency assets by the end of March 2022, before the first major crisis hit the cryptocurrency market last year with the collapse of the Terra ecosystem in May.
Thiel is a cryptocurrency enthusiast who has stated that his “worst mistake” was investing “too late and too little in bitcoin.” Thiel, co-founder of PayPal, Palantir Technologies, and Founders Fund, was the first outside investor in Facebook and one of the first well-known investors to place a bet on $BTC.
Thiel was still bullish on cryptocurrency in April 2022, after the Founders Fund sold most of its cryptocurrency holdings, telling a conference in Miami that “we’re at the end of the fiat money regime” and predicting that $BTC could increase by a factor of 100, despite the fact that it was trading at $44,000.
After the failure of numerous high-profile companies in the area, including Celsius Network, BlockFi, Voyager, Three Arrows Capital, and FTX, the price of BTC fell from an all-time high near $70,000 in late 2021 to a $15,000 low last year.
Notably, the fund abandoned a number of other assets between 2020 and the end of last year, allowing it to return around $13 billion to investors. Among these departures are its stakes in Airbnb and Palantir, the data analytics startup co-founded by Thiel.
The firm still manages more than $11 billion in assets, including $5 billion raised last year across two vehicles. It owns a stake in more than 100 companies, including Elon Musk’s SpaceX, the defence technology firm Anduril, and the ride-hailing app Lyft.