Andreessenn Horowitz Raises New $4.5 Billion Crypto Fund• May 27, 2022 9:35 am • Comments
Silicon Valley firm Andreessenn Horowitz has recently raised a new $4.5 billion crypto fund that aims to heavily invest in crypto startups during a time when most of the crypto markets is down.
This is the firms fourth crypto fund and brings the company’s total investment in the crypto sector to roughly $7.6 billion.
The firm will be investing both directly into digital assets as well as companies that operate within the industry space through equity acquisition.
This was similar to what the firm did back in 2017 which had a similar market environment as today which ended up becoming one of the most profitable moves the company ever did.
What crypto winter? Andreessen Horowitz is raising a mammoth $4.5 billion venture fund, the largest ever in crypto https://t.co/6xthGMxv9u
— Bloomberg Crypto (@crypto) May 26, 2022
Andreessen’s first crypto-focused fund was launched four years ago, during a downturn now known as “crypto winter.”
“Bear markets are often when the best opportunities come about, when people are actually able to focus on building technology rather than getting distracted by short-term price activity,” Arianna Simpson, a general partner at Andreessen Horowitz told CNBC in a phone interview.
Cryptocurrencies have slid significantly from their all-time highs, with bitcoin down more than 50% since its November peak, and they remain tightly correlated to higher growth tech stocks, which have undergone a major slide this year.
Earlier in May, the crash of stablecoin TerraUSD shook investor sentiment and caught the attention of regulators.
But Simpson said investors should not worry about the firm’s bets.
Top executives at the firm are seeing long term potential in the industry and have compared it to large super cycles that have happened in the past for PCs and the internet.
So far, crypto startups are among the ones that are currently getting the most in funding with them bringing in a record of $25 billion in venture capital so far in just last year.
The advancement of Web 3.0 is also something that has been mentioned continually and critics seem to be the ones that are still focused on Web2.0.
How the company’s latest crypto fund move will turn out will be revealed in a few years time but so far the firm has bet in all the right places.
— Blockworks (@Blockworks_) May 25, 2022
Crypto Fund IV continues to be helmed by longtime GP Chris Dixon, who has seemed to up his public persona in recent months, particularly on Twitter, where he breathlessly defends the web3 space from its detractors, getting into occasional spats with figures like Block’s Jack Dorsey and Box’s Aaron Levie.
The continued skepticism among plenty of investors and entrepreneurs has grown louder in recent weeks following the particularly ugly collapse of the Terra ecosystem and its stablecoin UST, which imploded seemingly overnight, evaporating tens of billions in value while renewing calls among federal lawmakers to fast-track legislation aimed at reining in the industry.
When asked whether the market’s cooling will scare traditional firms away from continuing their crypto bets, a16z’s Arianna Simpson told TechCrunch that “it’s likely other firms will pull back,” but that “the size of our new fund speaks to the level of excitement and belief we have in this category.”
Great to see this today. It's when everyone's stomachs are queasy that smart money moves in.
Andreessen Horowitz bets on crypto ‘golden era’ with new $4.5bn fund https://t.co/xAMBaukCwc
— Paul Neuner (@TelcoinPaul) May 25, 2022
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