Peter Thiel: From PayPal "Godfather" to a Key Player Behind the Scenes in the Encryption Industry

Written by: Zen, PANews

The US-listed mining company BitMine has attracted widespread attention in the market for becoming the world's largest enterprise-level Ethereum holder. With the disclosure of on-chain data, a new round of discussions has emerged regarding the role and impact of institutions in cryptocurrency asset allocation. Besides BitMine's chairman Tom Lee, who is always in the media spotlight passionately "supporting" ETH, another name has been frequently mentioned behind this heat—Peter Thiel.

As one of the most controversial and forward-thinking investors in Silicon Valley, Thiel showed interest in Bitcoin and the potential of decentralization early on and has made multiple bets in the crypto industry through his fund. Thiel's investment trajectory not only reflects his judgment on future technological trends but also, to some extent, has shaped the current landscape of the crypto market.

PayPal Godfather

If we were to find a central figure in the famous story of the "PayPal Mafia," its "godfather" Peter Thiel is obviously the most suitable.

In 1998, Thiel co-founded Fieldlink with Max Levchin, Luke Nosek, and others, which was later renamed Confinity. Due to the lack of commercial success in its handheld device security software development, the company quickly shifted its focus to digital wallets and launched the first version of the PayPal electronic payment system in 1999. In March 2000, Confinity merged with the online financial services company X.com, founded by Elon Musk and others, and officially changed its name to PayPal in June 2021.

In 2002, eBay announced its acquisition of this newly listed company for approximately $1.5 billion in an all-stock transaction, marking Peter Thiel's first significant leap in wealth as a co-founder and the first CEO.

Til and Musk

After the sale of PayPal, members of the "PayPal Mafia" spread out across Silicon Valley, igniting a new wave of entrepreneurship and investment. Among them, Peter Thiel’s $500,000 convertible note investment in Facebook in 2004 is often regarded as one of the most iconic early investments in Silicon Valley. At the time, Facebook was valued at only $4.9 million. As Facebook's first external investor, Thiel acquired a 10.2% stake and joined the company’s board of directors. After Facebook went public in 2012, Thiel has since liquidated over $1.1 billion.

In fact, as early as 1996, Thiel had started his venture capital career. At that time, he raised $1 million with the help of friends and family, investing $100,000 in his friend Luke Nosek's online calendar project, which ended in failure. Subsequently, on the advice of Luke's friend Max Levchin, they partnered to create a cryptography-related company called Fieldlink, which later transformed and eventually became PayPal.

After years of experience in Silicon Valley and successfully investing in Facebook, Thiel began to reshape his investment vehicle and philosophy. In 2005, he co-founded Founders Fund with old partners like Luke Nosek, which initially focused on defense-related startups and technologies. Thiel's own data company, Palantir, founded in 2003, also focused on counter-terrorism and anti-fraud as early application scenarios, quickly growing into one of the important data infrastructure suppliers for the U.S. government and large institutions. Palantir's stock price has also increased 20 times in the past 5 years, earning it the title of a veritable national fortune stock.

After achieving significant financial success with Facebook, Founders Fund shifted its focus to hard technology, aiming to support startups with the potential to "elevate civilization to new heights." In addition to Facebook, Thiel has also made early investments in a number of leading companies across various fields through personal investments or Founders Fund, including Airbnb, LinkedIn, SpaceX, Stripe, and DeepMind.

It is worth mentioning that Thiel also operated an investment management and hedge fund called Clarium Capital in 2002, which promoted a global macro strategy. The assets under its management quickly grew to $8 billion in 2008, but a series of unprofitable investments and client redemptions led to a decrease in managed assets to about $350 million by 2011.

From the founding and sale of PayPal, to Facebook's "legendary early investment", and then to the formation of Founders Fund and Palantir, Thiel essentially completed the transformation of roles from "entrepreneur - angel - venture capital partner - industry opinion leader" in the first decade of the 21st century. This process brought him considerable capital strength, networking resources, and the ability to always stay at the forefront of technology, quietly building a bridge for his entry into the crypto world in the near future.

Earned $1.8 billion during the cryptocurrency cycle

Among the many Silicon Valley investors, Thiel is one of the earliest well-known investors to intersect with the cryptocurrency and blockchain industry.

In September 2014, Thiel announced the latest batch of winners for the "Thiel Fellowship," with 20 young individuals making the cut, including 20-year-old Ethereum co-founder Vitalik Buterin. This fellowship is a two-year entrepreneurship funding program launched by Thiel through the Thiel Foundation in 2010, targeting young people aged 22 and under who have not yet obtained a college degree, aiming to encourage them to "drop out to start a business or do research." In addition to cash funding, the program also provides mentorship and networking support without taking equity in the founders' companies. As Ethereum rapidly developed, Vitalik quickly became a representative figure of the Thiel Fellowship.

Vitalik Buterin introduced Ethereum at the Bitcoin Summit in Miami in 2014.

Before funding Vitalik, Thiel had already shown interest and support for the early blockchain industry. In 2013, Founders Fund led a $2 million seed round investment in the cryptocurrency payment company BitPay. At that time, cryptocurrency payments were still in their infancy, and outsiders interpreted this as top Silicon Valley funds beginning to explore "payment-side" crypto applications, betting on their compliance and merchant acceptance prospects.

One of Peter Thiel's well-known investments in the cryptocurrency industry is in Block.one and Bullish, the former being the parent company of the public blockchain project EOS, and the latter being the cryptocurrency exchange launched by Block.one in 2021. In 2018, Block.one announced that it had secured strategic investments from investors including Peter Thiel and Bitmain. In 2021, Block.one led the incubation of the institutional cryptocurrency trading platform Bullish, claiming an investment scale of approximately $10 billion, with Peter Thiel, Alan Howard, and Louis Bacon listed as early key supporters.

In 2019, the mining infrastructure company Layer1 announced that it had secured $50 million in funding, with Peter Thiel as one of the investors. Layer1 aims to build comprehensive capabilities in the U.S. from power, chips to self-built mining farms, which aligns with Thiel's consistent investment preference for "infrastructure and upstream control."

In addition to supporting early crypto projects as an investor, Thiel's returns from direct investments in cryptocurrencies may be even more astonishing. According to Reuters, as one of the earliest institutional investors in cryptocurrencies, Founders Fund began heavily purchasing Bitcoin back in 2014 and liquidated it before the collapse of the cryptocurrency market in 2022, achieving a substantial return of approximately $1.8 billion.

In addition, sources said that Founders Fund resumed buying cryptocurrencies in the summer of 2023, investing $200 million to purchase BTC and ETH over several months. Reuters could not ascertain the average price of these purchases, but at that time, BTC was trading below $30,000, while ETH fluctuated between $1,500 and $1,900. Reuters commented: "The fondness for cryptocurrencies aligns with billionaire Thiel's interest in libertarianism, small government, and technological innovation."

Increase investment in cryptocurrency

In recent years, Thiel has repeatedly endorsed Bitcoin. In public appearances, he has praised Bitcoin for its function as "digital gold," calling it a hedge against inflation and central bank policies. In October 2021, at an event hosted by the Lincoln Network in Miami, Thiel was invited to share his views on cryptocurrencies, central banks, and macro issues, stating that he feels he has not invested enough in Bitcoin and that "all you have to do is buy Bitcoin."

It turns out that what Thiel said is not false. In recent years, Thiel seems to have increased his investment in cryptocurrency, and the investment strategy and focus of his Founders Fund have begun to shift towards the crypto sector.

Thiel praised Bitcoin at the 2022 Bitcoin Conference held in Miami, Florida.

In May 2023, former Pantera Co-CIO Joey Krug ( joined Founders Fund as a partner. Krug stated on X platform: "I will focus on developing the Founders Fund's crypto strategy for the next decade while seeking the next wave of crypto startups and founders worth supporting." With Krug's addition, Founders Fund begins to shift towards treating crypto as a mainstream investment category.

Amid the surge of crypto treasury enthusiasm among listed companies, Thiel has once again become the "behind-the-scenes winner." In mid-2025, Bitcoin mining company Bitmine Immersion Technologies announced a strategic shift of its "corporate treasury" towards Ethereum (ETH), appointing Fundstrat co-founder and renowned macro analyst Tom Lee as chairman, and initiating a $250 million private placement. In mid-July, as one of the company's most significant shareholders, Thiel disclosed that he holds approximately 9.1% of the shares. Following the announcement, the company's stock price rose nearly 15% in early trading.

According to data from Strategicethreserve, the US-listed company Bitmine's Ethereum holdings have reached approximately 1.2 million coins, with a market value exceeding $5 billion. This places it at the top of the Ethereum treasury company rankings, significantly ahead of the second-ranked Sharplink Gaming, which holds approximately 728,800 coins, valued at about $3.25 billion.

In addition, Thiel's early investments from four years ago are also starting to pay off. In August 2025, Bullish went public on the New York Stock Exchange and surged on its first day, marking a formal entry into the public capital market for Thiel's long-term bets on "institutional trading infrastructure."

Power brokers, Thiel's political influence layout

In addition to achieving commercial success in the fintech and cryptocurrency sectors, Peter Thiel's influence has also reached the power center of Washington. As a "super capitalist of the tech world," Thiel's role in American politics can no longer be ignored; he has long been positioning his influence in the White House and Congress by funding candidates and establishing political and business connections.

As one of the few Republican supporters in Silicon Valley, he publicly backed Trump during the 2016 presidential election. In an environment where almost everyone in Silicon Valley opposed Trump, Thiel's high-profile support was indeed unusual, but as a "self-proclaimed libertarian who believes in capitalism," he similarly valued Trump's anti-establishment appeal.

In terms of political donations and networking, Thiel is also very active. In 2016, as a key ally of Trump, Thiel donated $1.25 million to the Trump campaign and became a member of the presidential transition team.

In addition, the Los Angeles Times pointed out that he has long invested in Republican candidates, especially in the new generation of conservative politicians related to the technology industry. For example, he donated a record $15 million to his protégé — former employee and current U.S. Vice President JD Vance, which is the highest single donation in the history of the Ohio Senate campaign. He also introduced Vance to meet with Trump, helping Vance secure Trump's endorsement, and indirectly identifying a "golden partnership" for Trump in the later presidential campaign and second term.

Tear, JD Vance and Trump

Another Silicon Valley newcomer, Blake Masters, who previously served as COO of the Thiel Foundation and is a co-author of Peter Thiel's entrepreneurial book "Zero to One," has also received funding and support from Thiel as they conspire on their political path. Thiel has invested over $10 million into the super PAC supporting their campaigns.

Several major media outlets in the United States have described Thiel as a "power broker" or "big donor" in the Republican tech world. Business Insider even referred to him as the "king of the Republicans," as he was an early supporter of Trump and became the first tech investor in Silicon Valley to fulfill his donations in 2016.

It is worth mentioning that Thiel's attitude towards the Trump camp has changed. In a 2023 report by The Guardian, Thiel stated in an interview with The Atlantic that his "support for Trump's decisions is like an 'incoherent cry for help'; the developments are much crazier and more dangerous than imagined." The report also noted that Trump was very unhappy when Thiel rejected a request for a $10 million donation during a phone call earlier in 2023. Ultimately, Thiel did not participate in funding the 2024 political campaign.