Thiel’s venture capital firm, Founders Fund, made headlines in late 2017 after buying between $15 and $20 million worth of bitcoin, when institutions had yet to make significant purchases in cryptocurrency. The investment became worth hundreds of millions of dollars in 2018 as the price of bitcoin rose, making other investors and organizations take notice.
Thiel has been an outspoken proponent of Bitcoin, and cryptocurrencies in general. He has invested in crypto companies and blockchain technologies and has routinely discussed crypto in interviews and at various crypto conferences.
A longtime libertarian, Thiel holds anti-establishment views and is a supporter of limited government, personal freedoms, and privacy – convictions that he believes align with crypto ideals.
Personal history
Thiel was born in Frankfurt, Germany in 1967, and his family migrated to the US when he was one year old. As a teenager, Thiel was a fan of science fiction and read works by Ayn Rand (author of Atlas Shrugged and The Fountainhead). He graduated valedictorian of his high school class and went on to earn a BA in Philosophy from Stanford University and a JD from Stanford Law School.
After law school, Thiel clerked for a judge on the US Court of Appeals and worked as a securities lawyer for Sullivan & Cromwell, a multinational law firm.
He noticed that internet and personal computing companies were gaining traction at the beginning of the 1990’s dot-com boom and decided to take advantage of the investment opportunity. He raised $1 million from friends and family to start Thiel Capital Management. The company initially made some bad investments in unsuccessful web projects, losing close to $100,000.
Business ventures
In December 1998, Thiel co-founded Confinity, a software company that originally facilitated payments between Palm Pilots, an early hand-held digital organizer.
Thiel saw further opportunity for online payments and wanted to create a digital wallet for consumers with the security of data encryption. As a result, Confinity launched the money transferring platform PayPal. PayPal grew through mergers with Elon Musk’s financial services company, X.com, among others, and was famously sold to eBay for $1.5 billion in October 2002.
Following the sale of PayPal, Thiel co-founded Palantir Technologies, a data analysis firm. The company has been highly successful, with a peak valuation of $20 billion in 2015. He continues to serve as Chairman.
Thiel became one of the first outside investors of Facebook with a $500,000 investment (representing a 10.2% stake in the company) while occupying a seat on the board. He sold shares of the company over the years, making up to $600 million dollars, and still retains some shares as of 2022.
Thiel also established Founders Fund, a venture capital firm. As of 2022, the fund managed over $11 billion in assets and invested in numerous successful startups, including Lyft, AirBnB, Spotify, Stripe, and LinkedIn.
In 2012, Thiel co-founded Valar Ventures, spun out of Founders Fund, that focused on funding for tech startups outside of Silicon Valley (including overseas). Valar was the first firm to invest in Xero, a cloud-based accounting software.
Role in the cryptocurrency community
Thiel has made significant investments in crypto companies, both personally and through his venture capital funds, and has talked positively about the potential of blockchain technologies. “Bitcoin is the most honest market in the world. It is the most efficient market,” he said at the Bitcoin 2022 conference.
From Bitcoin skeptic to advocate
Thiel was originally lukewarm to cryptocurrencies, displaying both skepticism and an interest in blockchain’s possibilities. In a 2014 Reddit AMA (Ask Me Anything), Thiel said that while Bitcoin has created a new currency, the infrastructure was still lacking. “I will become more bullish on Bitcoin when I see the payment volume of Bitcoin really increase,” he wrote. The year prior, Thiel told an audience that Bitcoin had a 20% chance of success.
However, Thiel started testing the waters of crypto investments with his Founders Fund, notably leading a $2 million investment in bitcoin payment services provider BitPay. Thiel said that he still retained some skepticism but generally believes Bitcoin had a promising future.
Founders Fund crypto investment
In 2017, Founders Fund bought between $15 million and $20 million in bitcoin, a major investment in the currency at the time.
The fund cashed out its crypto holdings in the spring of 2022, making about $1.8 billion on the sales. Notably, Thiel gave a pro-Bitcoin speech at a conference one month before, calling out investors who were critical of cryptocurrencies.
Other crypto industry investments
Founders Fund and Valar Ventures have made significant investment in crypto companies, including Tagomi Systems Inc., a crypto trading platform since acquired by Coinbase; Layer1, a crypto infrastructure platform; Bitpanda, a European crypto brokerage; Bullish, a regulated crypto exchange; and Vauld, a lending platform.
Valar Ventures also held 19% of shares in crypto lender BlockFi, which filed for bankruptcy in the wake of the FTX collapse.
Peter Thiel essentials
- Peter Thiel is an entrepreneur and billionaire venture capitalist known for founding PayPal and Palantir Technologies and being an early investor in numerous successful tech companies.
- Thiel is a champion and investor in Bitcoin and blockchain technologies, funding a variety of crypto companies and speaking about crypto at conferences.
- Thiel believes that the foundations of crypto correspond with his strong libertarian views of limited government and anti-establishment.