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 on Wednesday it would allocate about $1.5 billion to seed investments, while the remaining $3 billion would be earmarked for venture capital investments — the most biggest crypto fund to date.
The new fund is Andreessen’s fourth and largest to focus on cryptocurrency investments, bringing its total investment in the space to over $7.6 billion.
The Financial Times first announced Andreessen’s plans in January, as venture capital firms increasingly piled into crypto amid a market frenzy over rising prices. and new applications of blockchain technology such as non-fungible tokens, dubbed the “web3” movement.
However, the speculative boom has since waned as recent interest rate hikes have prompted investors to flee the riskier corners of global financial markets. The selloff hit crypto tokens such as bitcoin, as well as those providing the underlying infrastructure such as 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 reaching a new “golden era” in which “new talent, a viable infrastructure and community knowledge” stimulates rapid innovation.
“We believe blockchains will power the next major computing cycle,” he said. “That’s why we decided to think big.”
Web3 proponents such as Dixon generally seek to use distributed ledger technology to give users greater control and ownership of their data. They also seek to disintermediate Big Tech groups that monetize data as part of their ad-based business models – and which have typically been the recipients of VC funding in the past.
Dixon said the company targets startups of all stages in areas such as decentralized social media and decentralized autonomous organizations, which aim to be governed by code. He also cited NFT communities, creator monetization, and decentralized finance, among others.
The company can invest in businesses as it would regular startups, or invest in the tokens or coins generated by a particular project.
Addressing 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 periods of market instability or slowdown. market. Because it really allows people to focus on technology and construction rather than being distracted by short-term price fluctuations.
She added that the company is focusing on “the 5, 10 year horizon and beyond”.
Last week, Andreesen announced that it had raised $600 million to create its first-ever gaming-focused fund, with a focus on investing in gaming apps, studios and infrastructure. to support the construction of a virtual world known as the Metaverse.
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Andreessen Horowitz Bets on Crypto’s ‘Golden Age’ With New $4.5 Billion Fund
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