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Andreessen Horowitz raises $4.5 billion crypto fund in down market


Chris Dixon, general partner at Andreessen Hoowitz, talks about cryptocurrency in the TechCrunch disrupt forum, San Francisco, October 2, 2019.

Kate Munsch | Reuters

Andreessen Horowitz will invest millions of dollars in crypto startups while the digital asset markets are stuck in a rut.

Silicon Valley’s Andreessen announced Wednesday that a new $4.5B fund was created to back crypto and blockchain-related companies. Andreessen has now raised $7.6 billion for this fund, making it the fourth for this asset class. Andreessen plans to invest in both cryptocurrencies that underpin projects as well as company equity.

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Andreessen’s firstFour years ago, a crypto-focused fund launched during the downturn known as “crypto winter.”

Arianna Simpson from Andreessen Horowitz, general partner, said that bear markets often present the most promising opportunities. She explained this to CNBC via a telephone interview.

The price of cryptocurrencies has fallen from its all-time highs. bitcoinThese stocks are down by more than half since November’s peak. They remain strongly correlated to high growth tech stocks that have seen a dramatic slide this year. Regulators were alerted to the TerraUSD crash in May which shook investor confidence.

Simpson stated that investors shouldn’t be concerned about what the firm is doing.

She said that technical diligence as well as other types of diligence are key to ensuring that projects meet the requirements of our standards. We continue to only invest in the most elite founders, even though our investment pace has been slow.

Simpson and Chris Dixon compare the long-term opportunities in crypto to the next big computing cycle after the 1980s with PCs and then the web in the 1990s.

Andreessen Hoowitz is best known for placing early bets. LyftPinterest and Slack, and made its first major crypto investment with Coinbase in 2013. In 2013, the firm supported several start-ups within crypto and NFT, including Alchemy Labs, Avalanche Labs, Dapper Labs OpenSea Solana, Yuga Labs, and Dapper Labs. The firm invested in earlier this week FlowcarbonThe controversial WeWork founder Adam Neumann also backs ‘, which is a blockchain-based carbon credit trading platform.

Although cryptocurrencies might be losing momentum right now, they are still able to make money. flowing into private companies is at all-time highs. Start-ups using Blockchain brought in a record $25 billion in venture capital dollars last year, according to recent data from CB Insights. This is eight times more than a year ago.

Some techno luminaries have scorned the recent flood of capital into “Web3” startups that seek to use blockchain technology to grow their businesses. These are two of the most prominent tech billionaires in the world. Tesla CEO Elon Musk and Twitter co-founder Jack Dorsey, have been among those questioning “Web3.” Dorsey argues that VCs and limited partners will end up with Web3 and they “will never lose their incentives” he tweeted. He called it a “centralized organization with a distinct label”.

Simpson stated that people skeptical of the technology aren’t where they are. He said, “The good news is we have access to brilliant builders every day.” “The other thing I would add is that many of the skeptics are the titans of Web 2.0 — they have been very much in a position to profit from and benefit from the closed platforms.”