Ether Surges: Peter Thiel Bets Big on Cryptocurrency

NEW YORK, NY — Ether, the cryptocurrency often overshadowed by bitcoin, has surged about 13.5% this month, benefiting billionaire investor Peter Thiel significantly.

The venture-capitalist has increasingly invested in ether, anticipating that Ethereum, the blockchain behind the token, might become Wall Street’s key platform for launching new financial products and services. Unlike bitcoin, which has a capped supply, ether has no set limit, and is increasingly being used for transactions on Ethereum, where developers create applications for trading, lending, and borrowing digital currencies.

So far this year, ether has risen by about 27%, outperforming bitcoin’s 20% gain. The bitcoin rally is partly fueled by companies issuing shares and debt as treasury assets, a trend now emerging with ether as well.

Thiel, a co-founder of PayPal and an early Facebook investor, has made significant gains from his ether-related investments. His firm, Founders Fund, holds 7.5% of ETHZilla, which shifted focus from biotech to investing in ether, leading its stock to triple in value recently before dropping back. The company’s market valuation surged from $18 million in late July to $741 million as of Thursday.

Additionally, Thiel’s firm has a 9.1% stake in Bitmine Immersion Technologies, which has seen its value skyrocket by more than 1,000% since late June, now valued at $8.3 billion.

Though his investments in ether are substantial, the increase in value tied to Thiel’s stake in Palantir has been markedly greater this year. It remains unclear if he has any other private investments in ether, as he declined to comment on the matter.

Several associates of Thiel indicate that the firm’s recent investments are grounded in the belief that the Ethereum network will continue expanding. “It’s a broad play on Ethereum,” stated McAndrew Rudisill, executive chairman of ETHZilla, in discussions with Thiel’s Founders Fund.

The optimism for Ethereum revolves around its potential to serve as an alternative for traditional financial transactions. As interest grows, ether, as the native token, is expected to benefit from increased activity on the platform. Tokenized money-market funds from companies like BlackRock and Franklin Templeton have already begun operating on the Ethereum network.

The traction for Ethereum is evident, with more than $1.2 trillion in activity recorded this year, up from $960 billion during the same period last year, according to data from The Block.

Despite the optimism, investing in ether does carry risk. The widespread adoption of Ethereum in finance remains uncertain, and some of the activity on the network is related to spam and phishing attacks. The recent surge in ether’s price may also indicate a speculative search for alternatives to bitcoin rather than a firm validation of Ethereum’s future.

The recent administration’s increased interest in cryptocurrencies has introduced fresh momentum, with discussions surrounding stablecoins gaining traction. Treasury Secretary Scott Bessent hinted that stablecoins, many traded on Ethereum, could play a role in managing national debt.

Thiel’s backing has been pivotal for Ethereum’s co-founder, Vitalik Buterin, who dropped out of college after receiving Thiel’s support to launch the network. In 2023, crypto investor Joey Krug joined Founders Fund to lead their crypto strategy after previously creating Augur, a decentralized prediction market built on Ethereum.