Crypto Biz: Peter Thiel Eyes the SVB Throne

Key Takeaway

• Peter Thiel and tech billionaires are building Erebor bank to replace Silicon Valley Bank
• Circuit launches crypto asset recovery system for institutions
• MicroStrategy expected to report massive $13 billion profit from Bitcoin
• Robinhood expands to layer-2 on Arbitrum for tokenized stock trading

Following the 2023 collapse of Silicon Valley Bank (SVB), Peter Thiel and other tech billionaires have seized a significant market opportunity. They are now launching Erebor – a financial institution named after The Lord of the Rings stronghold specifically to finance crypto companies and startups struggling to secure funding since SVB’s collapse.

The abrupt collapse of SVB in 2023 sent shockwaves through the U.S. banking industry, leading to a widespread tightening of lending standards. While First Citizens Bank took over SVB’s assets, its distinctive market position has remained vacant until now.

Context: Before collapsing, SVB served nearly half of all venture-backed technology and life sciences companies in the United States.

This week’s Crypto Biz explores Thiel’s ambitious venture, a new recovery system for institutional crypto investors, and Michael Saylor’s strategy, with massive crypto profits in Q2 but accompanied by a significant asterisk.

Billionaire Group Wants to Build SVB Competitor

According to a Financial Times report, billionaires Peter Thiel, Palmer Luckey, and Joe Lonsdale filed for a bank charter for Erebor, targeting startups, crypto firms, and other “risky” businesses. And their goal is to capture the lucrative—albeit volatile—market abandoned after SVB’s collapse.

The tech group hopes to fill the gap left by the collapse of Silicon Valley Bank – a potentially lucrative, if volatile, market.

Thiel is no stranger to digital assets. He’s an outspoken Bitcoin advocate and has also invested in Bullish, a crypto exchange that has reportedly filed for an initial public offering in the United States.

The SVB collapse was the first domino in a US banking crisis that triggered several failures in 2023, including Silvergate Bank, Signature Bank and First Republic Bank.

Circuit Launches Crypto Recovery System for Institutions

Circuit has launched an enterprise-grade digital asset recovery solution to address a key institutional challenge. ‘Most people aren’t equipped for true self-custody,’ notes CEO Harry Donnelly. Leveraging Automatic Asset Extraction (AAE) technology, the system prevents permanent crypto losses. The solution is already live, serving clients including UAE-based custodian Tungsten and crypto infrastructure firm Palisade.”

“Institutions view asset recovery as a fundamental requirement, not a nice-to-have,” Donnelly said. “As more enterprises hold digital assets, ensuring those assets don’t simply disappear becomes critical. The institutional mindset is about risk management and fiduciary duty.”

Circuit’s launch comes amid estimates that between 11% and 18% of Bitcoin’s fixed supply is already lost forever.

MicroStrategy Expected to Report Massive Bitcoin Gains in Q2

Despite ongoing struggles in its core software business, MicroStrategy is expected to report a staggering $13 billion in unrealized gains from its digital asset holdings in Q2. MicroStrategy is the former business intelligence firm now renowned as a Bitcoin treasury. 

Chairman Michael Saylor confirmed the company now holds 597,325 BTC, which generated a 7.8% Bitcoin yield last quarter. Demonstrating unwavering commitment, MicroStrategy “stacked sats” again last week, acquiring an additional $531 million worth of BTC.

However, this massive crypto profit stands in stark contrast to its traditional operations: Q2 software revenue is projected at just $112.8 million, marking a year-over-year decline.

MicroStrategy’s bold Bitcoin bet has become a case study for dozens of companies that have adopted similar approaches. According to Cointelegraph, 250 businesses now hold Bitcoin, with 26 announcing BTC treasury strategies just last month.

Robinhood Launches Layer-2 on Arbitrum

Robinhood (25M+ users) is expanding its crypto push by launching a dedicated layer-2 blockchain on Arbitrum for trading tokenized U.S. stocks and ETFs. The move grants EU investors access to 200+ tokenized assets, days after introducing micro futures for BTC, SOL, and XRP.

This latest move builds on Robinhood’s broader advocacy for pro-tokenization legislation in the United States, as it works toward launching a real-world asset exchange.