One of Silicon Valley’s biggest tech and investment firms, Andreessen Horowitz, has announced the creation of a crypto investment fund worth $300 million. The firm has described this as an “all weather” fund which will continue to invest, no matter what the market is doing.
The company’s announcement should be greeted with enthusiasm by the crypto-community which has seen prices consistently falling over the last few weeks. The price of bitcoin is hovering around the six-thousand-dollar mark at the moment, a spectacular tumble since the dizzy heights of $19k in December.
Andreessen Horowitz, or “A16Z” as it is known, has a history of bullishness regarding crypto. It has made numerous strategic investments over the years in huge companies including Coinbase and Facebook. General Partner and board member Balaji Srinivasan is running Earn.com, which is now a Coinbase portfolio company.
In this latest round of crypto-bullishness, the company, in addition to creating this $300 million fund, has hired a new General Partner, Katie Haun. As well as being the firm’s first ever female GP, she boasts impressive credentials; she is a former federal prosecutor who had a significant hand in leading the case against dark-net marketplace Silk Road, as well as controversy-soaked exchange BTC-e.
Explaining why the company was creating the fund, A16Z highlighted the novelty of trust as a primitive that blockchain exploits. This leads to a unique relationship between developers, users and the platform, a relationship which can be applied to a broad range of use-cases across many fields. In explaining what they believe the importance of the development path is, the firm stated:
“In an era in which the internet is increasingly controlled by a handful of large tech incumbents, it’s more important than ever to create the right economic conditions for developers, creators, and entrepreneurs.”
The fund’s long-term focus makes its investment an “all weather” fund, according to the company. It will be investing in projects both at the genesis phase of development, to those which are already off the ground – so-called non-speculative investments. The crypto-winter which has set in since January has not tempered the bullish outlook at the company and so investment by the fund will continue whatever the weather in the market.
“We have an “all weather” fund. We plan to invest consistently over time, regardless of market conditions. If there is another crypto winter, we’ll keep investing aggressively.”
The firm’s announcement raises hopes for an end to the bear market which has endured for the first half of the year. It also highlights that the firm sees development of use-cases as critical to development of the crypto-ecosystem. As reported in ToshiTimes yesterday, Ben Davenport of BitGo theorized that the value of use cases was rather negligible compared to the value of HODLing; A16Z’s investment into the space clearly shows the contrary: a belief in the value of use cases.
“We want services powered by crypto protocols to be used by hundreds of millions and eventually billions of people. Crypto tokens are the native asset class of digital networks, but their value is driven by the underlying, practical uses cases.”
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Alex has been putting words on paper since he was old enough to hold a pen; when he bought his first bitcoin in January 2017, those words discovered their place within crypto as well. He holds a master’s degree in international relations from Leiden University in the Netherlands, and his special expertise lies in European cryptocurrency regulation.