Even after weeks of turbulence, the future of the crypto market continues to be a gloomy one. Between May 7 and May 12, over $56 billion was lost in value in the crypto industry. Coinbase, the largest exchange that made a recent public debut, is trading down more than 75% year to date as its market cap continued to plummet.
And after its rather dramatic crash and the continued fall of public tech stocks alongside the prices of most cryptocurrencies, most investors across the world are (rightfully) apprehensive about pouring their dollars into the crypto market right now.
But then again, no pain no gain, and while it might be risky to invest in the crypto market now, it may also result in gaining something worthwhile. Andreessen Horowitz is no ordinary investor, and at a time when the ray of hope seldom seems to shine on the crypto industry, the coveted Silicon Valley VC firm announced that it has raised $4.5 billion for its fourth and largest crypto fund.
The multi-billion-dollar fund will be used to back blockchain and crypto companies and Web3 alike. While $3 billion will be allocated for making more traditional startup investments, the remaining $1.5 billion will be deployed towards making seed investments in Web3 technology.
It will continue to grow its operating teams as well by making recruitments across research and engineering, security, talent, and go-to-market functions such as marketing and partnerships.
The Crypto Fund IV was led by a16z’s partners Chris Dixon, Sriram Krishnan, Arianna Simpson, and Ali Yahya. According to Simpson, bear markets were often when the best opportunities came about – when people focussed on building technology “rather than getting distracted by short-term price activity.”
With its largest crypto fund to date, a16z has raised over $7.6 billion in crypto and Web3 investments so far. The latest fund is almost double the size of a16z’s last crypto fund – the $2.2 billion Crypto Fund III. It also comes a week after the VC firm launched Games Fund One, its inaugural $600 million fund to drive investments in the gaming industry.
a16z believes that we are now entering the golden era of Web3 – where new talent, viable infrastructure, and community knowledge came together. The craze of Web3 has increased in recent times, and the VC firm believes that a better internet will be built by the “massive wave of world-class talent” that entered the Web3 space over the past year.