Technology

Andreessen Horowitz Goes to Hamm on Cryptocurrency with a New $2.2 Billion Fund


In 2013, Venture capital firm Andreessen Horowitz led a funding round for a startup called Coinbase. Cryptocurrency was almost never mainstream, but Coinbase, just one year after Y Combinator, has positioned itself as the financial exchange of the future. Andreessen Horowitz led the $25 million round, the first of several investments that would make Coinbase the world’s best funded crypto company.

Eight years later, the investment paid off. In April, Coinbase became the The first major crypto company to go public And she did so with such enthusiasm that even crypto-skeptics took an interest in her. Coinbase closed its first day of trading at $328.28 per share, making its value $85.8 billion – making it Andreessen Horowitz’s biggest exit to date. (It is trading today at $226.01 per share.)

Now the company is betting that the growing interest in cryptocurrency can continue to make it very rich. Andreessen Horowitz today announced his third crypto-focused fund for “the next generation of visionary cryptocurrency founders.” Crypto Fund III’s $2.2 billion will be among the largest capital commitments to the crypto ecosystem in history, and nearly four times the size of the company The second cryptocurrency fund a year ago. Many partners wrote in a Blog postwhich suggested potential innovations in governance, networks, and distribution of economic benefits.

Andreessen Horowitz’s new fund comes amid a crypto-gold rush. So far this year, venture capitalists have invested $17 billion in crypto companies, according to Bloomberg. Union Square Ventures, another early investor in Coinbase, will do just that 30% reserve From its new $251 million fund to crypto companies. More traditional players, such as PayPal and Visa, are starting to infiltrate the crypto space by joining the new Blockchain Capital 300 million dollars. Many of these investors are betting that other startups can replicate Coinbase’s phenomenal success and that the recent obsession with things like Non-Fungible Symbols It will spark a number of new coding projects.

However, the fate of these startups is largely tied to the prices of Bitcoin and other mainstream cryptocurrencies. These prices can be volatile. Bitcoin price has fallen from a record low of $63,000 in April to around $33,000 this month. Recently, prices have been swinging based on Elon Musk’s tweets and crypto-mining news.

Cryptocurrencies have been volatile for as long as they’ve been around, but that hasn’t stopped entrepreneurs from pouncing on them when times are good. Chris Dixon, general partner at Andreessen Horowitz, called this “Crypto Price Innovation Course“: Prices go up, frenzy ensues, new startups are set up, and venture capital rushes to fund them. Then prices go down, attracting more media attention and taking some startups back with it. But Dixon argues that this “chaotic” cycle has led to many of innovations over the past decade.Andreessen Horowitz has funded some of these companies with his $515 million Crypto II fund, including Aleo, which helps build decentralized applicationsand Goldfinch, a platform that allows cryptocurrency borrowing without crypto collateral.

As crypto mania approaches all-time highs, regulators are also beginning to pay more attention to cryptocurrencies: the Chinese government recently was hurt on bitcoin miners and startups that facilitate crypto transactions. In the US, some regulators have also called for greater enforcement of cryptocurrency exchanges.

To this end, Andreessen Horowitz has also introduced several new advisors to the crypto team, which aim to help “translate crypto into the mainstream” and possibly navigate future regulation in the crypto market. Tomicah Tillemann, former chair of the Global Blockchain Business Council and White House Adviser, will join as Global Head of Policy. He will join other advisers with government experience – Bill Hinman, former director of the Securities and Exchange Commission’s Corporate Finance Division, and Brent McIntosh, former Treasury Under Secretary for International Affairs. Anthony Albanese, who left the New York Stock Exchange last year to take up a role on Andreessen Horowitz’s crypto team, will now serve as chief operating officer.

With his massive new fund, Andreessen Horowitz plans to do more than just meet those future challenges. He hopes to find the next Coinbase – or something bigger.


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