Peter Thiel warned that bitcoin is losing decentralization, becoming a vehicle for wealth accumulation for institutions and states rather than the autonomy its creators envisioned.

From cypherpunks to institutions

Bitcoin originated with cypherpunks who prioritized cryptography, anonymity and financial autonomy as core principles for a permissionless currency that resisted centralized oversight.

Over time, adoption by banks, investment funds and governments shifted usage patterns toward custody, regulation and institutional custody services and surveillance.

"Bitcoin is gradually turning into a vehicle for wealth accumulation, losing its original ideals of decentralization."

— Peter Thiel

Contemporary implications

Thiel warned that the trajectory diminishes decentralization, describing contemporary bitcoin as increasingly a vehicle for wealth accumulation and institutional trading instead.

He compared institutional products and market structures to exchange-traded funds, singling out BlackRock as emblematic of this transformation today period.

He also noted that banks, funds and state agencies now routinely use and monitor $BTC, a shift that reflects broader institutional engagement with the asset class.

Observers assess whether broader access and regulatory clarity improve utility or whether core ideals of permissionless money are compromised by custodial concentration.