Andreessen Horowitz has launched a $4.5 billion cryptocurrency fund, making his biggest bet yet on the future of blockchain technology despite the dramatic market crash.
The Silicon Valley-based venture capital firm said Wednesday that it has raised about $1.5 billion.
The new fund is Andreessen’s fourth and largest to focus on cryptocurrency investments, bringing its total investments in the space to more than $7.6 billion.
The Financial Times reported first Andreessen’s plans in January, as VC firms increasingly pushed into crypto amid a frenzy in markets over rising prices and new applications of blockchain technology such as non-fungible tokens, were dubbed the “web3” movement.
Since then, however, the speculative boom has slowed as recent interest rate hikes caused investors to flee the riskiest corners of global financial markets. The sell-off has hit crypto tokens like bitcoin, as well as those providing the underlying infrastructure like crypto exchanges and lenders.
Despite the so-called “crypto winter,” Chris Dixon, managing partner and founder of Andreessen’s crypto arm, said the group believes the space is entering a new “golden era” that will spur “new talent, viable infrastructure, and community knowledge.” rapid innovations.
“We believe that blockchains will power the next great cycle of computation,” he said. “That’s why we decided to make it big.”
Web3 proponents like Dixon typically try to use distributed ledger technology to give users more control and ownership over their data. They’re also trying to disintermediate the big tech groups that monetize data as part of their ad-based business models — and who have typically been the recipients of VC funding in the past.
Dixon said the company is targeting startups of all stages in areas like decentralized social media and decentralized autonomous organizations that aim to be governed by code. He also cited NFT communities, creator monetization, and decentralized finance, among others.
The company can invest in companies like normal startups or invest in the tokens or coins that a particular project generates.
Asked about the bear market, Arianna Simpson, General Partner at Andreesen said, “What we have seen is that many of the best protocols and companies are actually built during times of market instability or downturn. Because it really allows people to focus on the technology and building instead of being distracted by short-term price swings.”
She added that the firm is focused on “the 5, 10 year horizon and beyond.”
Last week, Andreesen announced it had raised $600 million to launch its first-ever gaming fund, with a focus on investing in gaming apps, studios and infrastructure to help build a virtual world called the Metaverse.
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