May 27, 2022 · less than 3 min read
Crash or no crash – a16z is staying all-in on crypto.
Burn baby burn, crypto inferno
On Wednesday, multi-billion venture capital firm – co-founded by Mark Andreessen and Ben Horowitz – a16z announced that it had raised over $4.5 billion for its fourth crypto fund, even though the recent crypto crash wiped out over $1.6 trillion of value from the markets. A16z is one of very few firms demonstrating this much hope for the future of crypto, with this latest fund the largest of its kind so far.
According to the VC firm, “markets are seasonal,”, and a16z seems hellbent on surviving the “crypto winter”. But is it just burning cash to stay warm? And will the “crypto summer” ever arrive?
Don’t stop believin’
If anything, you have to admire the relentless confidence. A16z has its own media company, research arm, and investment portfolio, all of which allow it to double down on crypto in a way that other firms either aren’t able to or haven’t chosen to. At the same time, a16z doesn’t have to be quite so all-in as it currently is.
While many investors are tied to this asset class and, to be blunt, are holding on for dear life, a16z has the freedom of a diverse portfolio, meaning that even if crypto is shedding its prices, that’s only one side to a16z’s investments. No big deal, then.
A16z is all-in on crypto and has already coordinated some hefty stimulus of its own, including a $450 million funding round for Yuga Labs and a partial bailout of roughly $150 million for Axie Infinity, the play-to-earn digital sharecropping game. This is just the latest effort, and in the words of a16z Co-Founder Chris Dixon, “We’re going to use these funds to invest in promising web3 startups at every stage.”
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