Silicon Valley gangs, crypto wealth, and the power network of the US vice president

This is Peter Thiel's favorite question to ask in interviews, and it is also the opening sentence of his best-selling book "Zero to One".

If you ask him this question, the answer might be:

In 2003, when everyone was doing social networking, he chose to do data analysis for the CIA;

In 2014, when Bitcoin fell to 400 US dollars, he bought 20 million US dollars;

In 2022, when everyone was shouting "Bitcoin 100,000 US dollars", he cleared all his holdings. Today, 57-year-old Peter Thiel has a fortune of $26.6 billion. Palantir, the company he founded, has a market capitalization of $400 billion. He has made $2.5 billion investing in cryptocurrencies, including investments in the recently popular BMNR and the publicly traded crypto exchange Bullish. And J.D. Vance, whom he mentored, has become Vice President of the United States. But in Silicon Valley, he remains an anomaly: a billionaire who openly supports Trump, a tech entrepreneur working for intelligence agencies, and an investor who sold when everyone else was buying. This is a story about how contrarian thinking creates wealth and how patience translates to power. PayPal Palace Drama In December 1998, 31-year-old Peter Thiel and 23-year-old Max Levchin founded Confinity in Palo Alto. Almost at the same time, Elon Musk founded X.com. The two companies were engaged in a cash-burning war, each vying for dominance in online payments. Three months later, the two merged to form PayPal, with Musk as CEO. But the honeymoon period lasted only six months. In September 2000, while Musk was on vacation in Australia, the company's board voted to remove Musk as CEO, replacing him with Thiel. The ostensible reason for the dismissal was technical disagreements: Musk wanted to migrate from Unix to Windows. But the deeper reason was a fundamental disagreement over the company's direction: Musk wanted to build a comprehensive financial services platform, while Thiel wanted to focus solely on payments. This was one of the most famous palace intrigues in Silicon Valley history, and Thiel's coup was masterfully executed. He chose to launch the coup without Musk, enlisting the support of Max Levchin, then PayPal's head of technology, and framing the power struggle as a technical exercise. After the change of leadership, PayPal focused on its payments business, quickly achieving profitability and ultimately selling it to eBay for $1.5 billion in 2002. As the largest individual shareholder, Thiel cashed out $55 million, which became his first pot of gold in the investment world.

Former Investment Colleagues

More than two decades later, when people discuss Silicon Valley's power structure, one fact always comes up: many of the most influential people once worked in the same office at the same company.

And the owner of that office was Peter Thiel.

After the eBay acquisition in October 2002, Thiel used the $55 million cash from PayPal to establish the investment fund Founders Fund. His first investments were almost all made up of former PayPal colleagues, a group that later became known as the "PayPal Mafia": When Reid Hoffman founded LinkedIn, Thiel was its first outside investor, investing $500,000; when Chad Hurley and Steve Chen were tinkering with YouTube, Thiel participated in its early funding; when Jeremy Stoppelman wanted to start Yelp, the local review site, Thiel provided the first seed round... Most interesting is his relationship with Musk. After the "coup" in 2000, the two ostensibly parted ways. But in 2008, when SpaceX was on the verge of bankruptcy and its fourth launch failure threatened to spell the end of the company, Founders Fund led a $20 million investment. This investment kept SpaceX afloat until it secured the NASA contract. Investing in former colleagues' businesses also made Founders Fund a huge success. YouTube was acquired by Google for $1.65 billion, LinkedIn peaked at a market capitalization of over $26 billion, and SpaceX is now valued at over $200 billion. But Thiel's real concern didn't seem to be money. The "PayPal Mafia" gradually came to control half of Silicon Valley. Reid Hoffman became Silicon Valley's "super connector," with nearly every entrepreneur relying on him for connections. David Sacks, an entrepreneur turned podcast host, whose "All-In" podcast influenced public opinion throughout the tech world, became the White House's crypto czar. Musk, from Tesla to SpaceX to X, has practically defined the technological ambitions of this era. Even more remarkable is the loyalty of this network, which transcends commercial matters. In 2016, when Thiel was isolated throughout Silicon Valley for his support of Trump, members of the PayPal Mafia remained silent. They may have disagreed with his choice, but no one took offense. In 2024, when Thiel was pushing J.D. Vance to run for president, David Sacks not only donated money but also publicly endorsed him on a podcast. Every investment Peter Thiel makes adds a node to his power network, and every successful exit strengthens that network. Betting on Facebook, Selling It as Soon as It Goes Public In the summer of 2004, 20-year-old Harvard dropout Mark Zuckerberg also approached Thiel. At the time, Facebook had just surpassed 1 million users. The social networking market was already crowded, with Friendster boasting 7 million users and MySpace 5 million. Mainstream Silicon Valley investors were pessimistic about Facebook, but Thiel asked Zuckerberg a question: "What's the difference between Facebook and MySpace?" "On Facebook, you have to use your real name," Zuckerberg replied. It was this seemingly simple difference that led Thiel to make his judgment. He later wrote in his book, Zero to One, that authentic identity means trust, and trust means real social connections, not just fictitious numbers of followers. In September 2004, Thiel personally invested $500,000 in Facebook, acquiring a 10.2% stake. The terms of the investment were astonishingly simple: no board seat requirements, no liquidation preferences, and even no anti-dilution clauses. The story that followed vindicated his judgment. In 2005, when Accel Partners invested at a $127 million valuation, other VCs realized what they had missed. By 2007, Microsoft had bought in at a $15 billion valuation, and Facebook had become a phenomenal product. In May 2012, Facebook went public, opening at $38. While most early investors held on, Thiel sold 16.8 million shares on IPO day, cashing in approximately $640 million. He continued to reduce his holdings in the following months, ultimately turning his initial $500,000 investment in Facebook into a profit exceeding $1 billion, a return of over 2,000 times his investment. Facebook's stock price did eventually rise to over $300, suggesting Thiel hadn't maximized his investment. But just two years after Thiel cashed out, in 2014, Bitcoin's price plummeted to $400. On one side, everyone was embracing the hot stocks, while on the other, everyone was panicking about emerging markets. Thiel once again chose the latter. Buying the dip and selling the top, building a crypto empire. In 2014, Bitcoin was trading at $400, fresh from the ashes of Mt. Gox's collapse. The entire crypto market had a market capitalization of less than $5 billion. Around this time, Peter Thiel's Founders Fund quietly bought $15-20 million worth of Bitcoin at an average price of less than $500. The investment was so small it didn't even appear in the fund's quarterly reports. From 2014 to 2022, Founders Fund didn't sell a single Bitcoin, even increasing its holdings twice in 2017 and 2020. In March 2022, when Bitcoin was still trading at a high of $42,000, Founders Fund abruptly liquidated its entire holdings. According to a later report by the Financial Times, this cashout netted $1.8 billion. Two months later, Terra/Luna collapsed, ushering in the crypto market's worst bear market in history. By the end of the year, Bitcoin had plummeted to $15,500. Interestingly, in April, just after his precise escape from the top, Thiel delivered a passionate speech at the Miami Bitcoin Conference, extolling Bitcoin as "the future of financial freedom." He even created a "enemies list," labeling Buffett "Grandpa Socrates from Omaha" for not supporting Bitcoin. The audience applauded wildly, but no one knew this "evangelist" had just completed the largest-ever reduction in crypto holdings. But Peter Thiel is more than just a savvy cryptocurrency trader. While buying and selling Bitcoin, he's systematically investing in the entire crypto ecosystem: - Trading Infrastructure: In 2018, Founders Fund led an investment in Tagomi Systems, a company that provides cryptocurrency trading services to institutional investors. Tagomi solves the problem of trading slippage by aggregating liquidity from multiple exchanges. In 2020, Coinbase acquired Tagomi for $150 million. In 2021, Thiel personally invested in Bullish, an institutional-grade crypto exchange operated by Block.one. Bullish is unique in that it pursued compliance from the outset, obtaining licenses in multiple jurisdictions. In July 2025, Bullish officially filed for an IPO, with a valuation exceeding $9 billion. - Lending and DeFi: Valar Ventures (another fund of Thiel) invested in BlockFi in 2019, which was once one of the largest crypto lending platforms; but BlockFi eventually went bankrupt in 2022. In 2023, when the market was at its lowest, Founders Fund invested in Ondo Finance. The RWA track, which was ignored at the time, had become the hottest direction in the crypto field by 2025. - Project Incubator: In October 2023, Founders Fund also invested in Alliance DAO, acquiring a minority stake and providing support to Alliance DAO's portfolio companies. Alliance DAO is currently one of the largest incubators in the crypto industry and an early backer of star projects such as Pump.fun. - European Presence: Through connections in Germany, Thiel invested in Bitpanda, Austria's largest cryptocurrency exchange. Its valuation reached $4.1 billion in 2021, making it Europe's most valuable crypto unicorn. In the summer of 2023, Bitcoin hovered below $30,000 for several months. FTX's bankruptcy trial was ongoing, the SEC's crackdown on the crypto industry intensified, and mainstream media was filled with claims of "crypto's death." Just as everyone else was fleeing, Founders Fund returned. According to a Reuters report from February 2024, the fund purchased $200 million worth of Bitcoin and Ethereum in batches, half and half, from late summer to early fall of 2023. Time has once again proven Thiel's judgment. In January 2024, the SEC approved a Bitcoin spot ETF. Within months, over $50 billion in institutional funds poured in. By August 2025, Bitcoin surpassed $117,000 and Ethereum exceeded $4,000. Founders Fund's $200 million investment yielded a paper profit of over 100%. And on July 16 of this year, Bitmine announced that Peter Thiel's Founders Fund had purchased a 9.1% stake. Looking back at every stage of Peter Thiel's crypto journey, from escaping the market's peak to acquiring shares and positioning in the market, he's mostly hit the right notes. Publicly, he's a Bitcoin evangelist; in practice, he's a practitioner of contrarian thinking. By August 2025, various estimates indicate that Thiel has accumulated over $2.5 billion in profits from cryptocurrency: $1.8 billion from escaping the market's peak in 2022, $500 million from exits from early-stage investments, and $200 million from bottom-fishing in 2023. This doesn't include his holdings in Bullish, Bitpanda, and his recent investment in BMNR. In addition to investing in the PayPal mafia, Thiel actually founded his own company, Palantir, after leaving PayPal in 2003. Palantir develops intelligence systems for governments and the military. What were the mainstream trends in Silicon Valley at the time? Social networks, e-commerce, and search engines. But Thiel chose to do data analysis for the CIA. Palantir's first $2 million in seed funding came from the CIA's venture capital arm, In-Q-Tel, with Thiel contributing $30 million of his own money. The company's name is inspired by the "Palantir," the philosopher's stone from The Lord of the Rings that can see through everything. The next seven years saw virtually no public coverage. It wasn't until the 2010 Afghanistan War and the 2011 assassination of Osama bin Laden that the media learned that Palantir's intelligence analysis system played a key role. The company Thiel founded boasted a client list resembling the cast of a spy film: the CIA, FBI, NSA, the Pentagon. But in Silicon Valley, a place known for its freedom, this made Palantir a target of public criticism. Protesters demonstrated outside its offices, calling it an "evil corporation." Recruiting employees became difficult, and commercialization repeatedly encountered obstacles. When it went public in 2020, Wall Street was unimpressed. The company had been unprofitable for years and overly dependent on government contracts. Its stock price plummeted from $10 to $5.92. After the ChatGPT explosion in 2023, Palantir launched its AIP platform, combining 20 years of intelligence analysis capabilities with popular large language models to serve the internal process management of more enterprises. When Google withdrew from the Pentagon's AI project due to employee protests, Palantir took over. Subsequently, military orders began to surge: in 2024, the US Army signed a 10-year, $10 billion contract with Palantir; in April 2025, NATO officially purchased its Maven Smart System. Meanwhile, the company's stock price soared from $6 at the beginning of 2023 to $187 in August 2025, bringing its total market capitalization to $440 billion, exceeding the combined market capitalization of the three largest traditional U.S. defense companies. (See also: 20-fold increase in value in 5 years: The birth of America's most expensive national stock.) Palantir's true value lies not in its stock price. The company's systems connect every node of American power: the Department of Homeland Security uses it to track immigrants, the SEC investigates insider trading, and the IRS conducts tax audits. When J.D. Vance, whom Thiel promoted, became Vice President, Palantir's government contracts increased significantly. Through Vance, Thiel influenced policymaking, participated in the exercise of power through Palantir, and controlled Silicon Valley through the PayPal mafia. The synergistic effects of this power network are only beginning to emerge. From an initial investment of $30 million in 2003 to its current market capitalization of $440 billion, for Thiel, Palantir has brought more than just wealth; it's a passport to the heart of Washington power. Choosing to work for the CIA 20 years ago seemed like the most unlikely choice in Silicon Valley at the time. Looking back today, it may have been Thiel's most shrewd move.

Silicon Valley is never too late to create a king

In August 2025, the second-most powerful person in the United States will be the man who, just four years ago, called Trump "Hitler."

J.D. Vance, at 39, is one of the youngest vice presidents in American history.

From Yale Law School to Silicon Valley, from best-selling author to senator, and finally to vice president—behind this incredible trajectory, Peter Thiel has always been the driving force. In 2011, Peter Thiel was invited to give a speech at Yale Law School, arguing that elite institutions were overly focused on peer competition and that students blindly pursued climbing the ladder of prestige. J.D. Vance, seated in the audience, was deeply moved and met Thiel. Years later, he wrote about the speech, calling it "my most significant moment at Yale," and it changed the course of Vance's life. After graduating from Yale in 2013, he joined the top law firm Sidley Austin as expected. However, he resigned after just two years. His next stop was at Circuit Therapeutics, a biotech startup in Silicon Valley, where he became the Director of Operations. For a lawyer with no tech background, this was a huge jump. Circuit CEO Frederic Moll later admitted to the media that Vance was hired in part on Peter Thiel's recommendation. Thiel's venture capital fund had invested in Moll's previous company—a Silicon Valley-style favoritism. In 2016, Vance's career took another turn. He joined Peter Thiel's venture capital fund, Mithril Capital, as a partner. That same July, his memoir, Hillbilly Elegy, was published and quickly topped the New York Times bestseller list. Suddenly, this little-known venture capital partner became a nationally renowned writer and cultural commentator.

According to a 2024 report in the Wall Street Journal, former colleagues at Mithril recalled that during Vance's year at the firm, he was rarely seen in the office; he spent most of his time traveling around the country for book signings, speeches, and interviews.

But this seemed to be exactly what Thiel wanted: not to train an investment manager, but to create a public intellectual.

In March 2017, Vance left the Mithril Fund, but he did not leave Peter Thiel's orbit. He first joined AOL founder Steve Case's Revolution Fund before launching his own fund, Narya Capital, in 2019. Narya's investor list speaks volumes: Peter Thiel led the investment, joined by a16z founder Marc Andreessen and former Google CEO Eric Schmidt. In 2021, Vance announced his candidacy for the Ohio Senate. According to Federal Election Commission records, Thiel donated $15 million to Protect Ohio Values, a super PAC supporting Vance. This was the largest single donation to a Senate campaign in history by an individual. It wasn't just Peter Thiel. His friend David Sacks donated $1 million, and other Silicon Valley figures followed suit. Ultimately, donations from the tech industry accounted for the majority of Vance's campaign funds. An Ohio Senate seat became a target for Silicon Valley investment. From being elected to the Senate in November 2022 to being nominated as a vice presidential candidate in July 2024, Vance took less than two years. This speed is extremely rare in American political history. Multiple media outlets reported that Silicon Valley was remarkably unanimous in Trump's selection of a running mate. Not only Peter Thiel, but also Elon Musk, David Sacks, and others recommended Vance. These tech tycoons saw Vance not just as a vice president, but as their voice in Washington.

JD Vance’s Silicon Valley Network | <span leaf="" para",{"tagName":"p","attributes":{"style":"margin: 0px 8px 30px; padding: 0px; -webkit-tap-highlight-color: rgba(0, 0, 0, 0); color: ;   font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: center; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;"},"namespaceURI":"http://www.w3.org/1999/xhtml"}]'>Image source: The Washington Post

Clockwise from top left: Blake Masters, Joe Lonsdale, Peter Thiel, Jacob Helberg, David Sacks

After Vance took office, policies began to tilt.

The federal government has increased AI Peter Thiel's Palantir has been the primary beneficiary of the government's purchase of data analysis tools. Meanwhile, the US government's regulatory stance on cryptocurrencies has softened significantly. These changes may not be directly attributable to Thiel's influence, but the timing is intriguing. Thiel's relationship with Vance may also represent a new model of political influence. Unlike traditional lobbying or political donations, it's more like a "venture capital-style nurturing": identifying promising talent early on, providing financial and resource support to help them gain power, and then achieving long-term influence through ideological resonance. At 39, Vance may still have decades of political career ahead of him. This means Thiel's influence extends far beyond the typical election cycle. "What important truth do you believe in that most people don't agree with?" Perhaps for Peter Thiel, the answer has always been simple: power never belongs to those in the spotlight.