Betting on Wall Street RWA's preferred blockchain, Peter Thiel heavily invests in Ethereum

Billionaire investor Peter Thiel is betting that Ethereum will become the preferred platform for Real World Assets (RWA) on Wall Street, as his investment firm has heavily invested in Ethereum-related assets.

On Friday, according to Wall Street Watch, benefiting from Federal Reserve Chairman Jerome Powell's dovish remarks, the price of Ethereum surged 15%, reaching a historic high not seen in four years. Since the low point in April this year, the price of Ethereum has risen over 250%. One of Silicon Valley's most influential venture capitalists, Peter Thiel, has made significant gains during this rally.

His venture capital firm Founders Fund has deeply participated in this market by investing in several companies that use Ethereum as a reserve asset:

• Thiel's Founders Fund holds a 7.5% stake in ETHZilla, a company that recently transformed from a biotechnology firm to an investment tool focused on purchasing Ethereum.
• Thiel also controls a 9.1% stake in Bitmine, which recently raised $250 million to purchase Ethereum, with its stock price rising over 1000% since the end of June, currently reaching a market value of $9.2 billion.

Thiel's investment logic in Ethereum is that if Ethereum can become an alternative channel for processing the clearing and settlement of dollars, stocks, and other assets outside the traditional financial system, its native token will benefit significantly from increased network activity.

Wall Street Bets on Ethereum as the Preferred Blockchain for RWA

Unlike Bitcoin, which has a limited supply and is primarily used as a digital value storage tool, Ethereum has no hard supply cap but is increasingly used for transactions on the Ethereum platform.

Ethereum is an open-source platform where developers can build and operate applications for trading and lending digital currencies.

Wall Street Watch previously mentioned that Real World Assets (RWA) are being transformed into on-chain digital tokens through blockchain technology, linking traditional financial assets with physical assets (such as U.S. Treasuries, real estate, and green energy), opening up a massive market projected to reach $16 trillion by 2030.

Thiel believes that if Ethereum becomes an alternative to traditional settlement channels for dollars, stocks, and more, its native token will benefit from the growing activity on the platform. This vision is not a fantasy; Wall Street giants have already begun to establish a presence on Ethereum:

• The world's leading asset management firms, BlackRock and Franklin Templeton, have launched tokenized money market funds on the Ethereum network.
• Apollo Global Management has also issued a diversified credit securitization fund through Ethereum.

According to data, the total trading activity on Ethereum has exceeded $1.2 trillion this year, showing significant growth compared to $960 billion during the same period last year. Crypto data provider Nansen points out that these transactions mainly involve dollar-pegged stablecoins Tether and USDC, as well as deposit and withdrawal activities on major exchanges like Binance and Coinbase

Investment Risks Still Exist

Despite the impressive activity data of Ethereum, investors still need to be wary of the risks involved.

First, it is still uncertain whether Ethereum can be widely adopted by the financial industry. Goldman Sachs and BNY Mellon have launched tokenized money market funds on their privately built blockchain, indicating that Ethereum will face fierce competition from traditional financial giants' self-built platforms.

Second, some activities on the network may not stem from genuine financial demand. According to Nansen's analysis, some trading activities seem to be related to spam or malicious phishing attacks, casting a shadow over the authenticity of the network data.

Finally, the surge in Ether's price may also simply reflect speculative behavior. Nansen's research analyst Nicolai Søndergaard stated:

At least for now, the notion that 'Wall Street is rebuilding its financial infrastructure on Ethereum' sounds more like a marketing pitch to attract people to buy Ether concept stocks.

He believes that the price increase may be more about speculators looking for alternatives to Bitcoin rather than a true recognition of Ethereum's future