Thiel Effect: Crypto Stock Skyrockets After Billionaire Backing

Thiel's Investment Sends Crypto Stock Soaring

Shares of 180 Life Sciences Corp (ATNF), a digital asset treasury (DAT) firm focused on Ethereum, experienced a dramatic surge after it was revealed that Peter Thiel, the PayPal co-founder and billionaire tech investor, had acquired a 7.5% stake in the company.

The investment, made through Thiel's Founders Fund Growth Management, triggered a massive rally in ATNF stock, which jumped over 90% in early trading. At press time, the stock was up a staggering 182%.

From Biotech to Crypto: A Strategic Shift

ETHZilla, the operational arm of 180 Life Sciences, has undergone a strategic transition from a biotech focus to a DAT business model. The company currently holds a significant Ethereum position, reporting 82,186 ETH purchased at an average price of $3,806.71, totaling approximately $349 million. They also hold around $238 million in cash equivalents.

Avoiding Leverage: A Contrarian Approach

Unlike some crypto-focused entities that employ leverage to amplify their holdings, ETHZilla is taking a more conservative approach. Incoming chairman McAndrew Rudisill stated the company will avoid over-leveraging its Ethereum purchases, contrasting with Strategy, which has raised billions through convertible debt to acquire Bitcoin. This approach carries significant risks if debt cannot be refinanced.

Thiel's Broader Crypto Involvement

This isn't Thiel's only recent foray into the crypto world. He also holds a 9.1% share in BitMine, which has increased its at-the-market equity program to $24.5 billion to potentially finance additional Ethereum acquisitions.

Key Takeaways:

• Influence of Key Investors: Thiel's investment demonstrates the substantial impact that influential investors can have on the market value of crypto-related companies.
• Strategic Shift: The transition of 180 Life Sciences from biotech to a digital asset treasury model underscores the growing interest in and adoption of cryptocurrencies by publicly traded companies.
• Risk Management: The company's focus on avoiding excessive leverage highlights a growing awareness of the potential dangers associated with highly leveraged crypto investments.