Andreessen Horowitz partner Marc Andreessen
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Andreessen Horowitz is launching a multibillion dollar fund to invest in a volatile ecosystem whose betting will be as influential as the internet.
The Silicon Valley venture capital company founded by Marc Andreessen and Ben Horowitz announced its new $ 2.2 billion cryptocurrency fund on Thursday. It plans to use this capital in blockchain and digital asset startups.
“The size of this fund speaks for the size of the opportunity that is presented to us: Crypto is not only the future of finance, but, like the Internet in the early days, will change all aspects of our lives”, Katie Haun and Chris Dixon, partners , who run Andreessen’s cryptocurrency group, said in a blog post.
The company’s first crypto-focused fund was launched three years ago in what is known as the “crypto winter”. This year, Bitcoin’s value is up about 80% from its 2017 highs. The latest fund also comes at another bearish moment for Bitcoin.
The world’s original cryptocurrency has lost about half its value since hitting $ 60,000 high in April. This week alone, a 20% loss is on track. Detecting the volatility of the asset class, Haun and Dixon said, “Prices can fluctuate, but innovation continues to increase with each cycle.”
“We believe that the next wave of computer innovation will be driven by crypto,” the partners wrote, adding that they are “radically optimistic about the potential of crypto.”
The company is known for early betting on companies like Facebook, Instagram, Lyft, and Pinterest. Andreessen Horowitz took his first step into the field of digital assets in 2013 via Coinbase. Coinbase went public this year via a direct listing and is about 50% below its high on the day of the listing.
Andreessen Horowitz is also an early investor in the Facebook-backed Libra digital currency project, now known as diem, which has gone through a series of renaming and has encountered opposition from global regulators.
The company has interests in companies like OpeanSea and Dapper Labs, which are fueling the recent NFT boom, and plans to focus on “decentralized finance”. Also known as “Defi”, the term used to describe traditional financial applications such as lending or banking that are based on the same technology that underlies Bitcoin. The company said it plans to hold these crypto investments for a decade or more.
These digital asset investments are being driven by partners Haun, a former Justice Department attorney, and Dixon, who founded and ran two startups before joining Andreessen Horowitz. Haun helped found the Justice Department’s first government working group on crypto and worked on the first high profile cryptocurrency-related case, Silk Road.
Andreessen Horowitz also announced a wave of new hires for the fund, including former Securities and Exchange Director Bill Hinman, who will join the company as an advisory partner. Rachael Horwitz, who was in charge of communication on Twitter, Google and Facebook, joined as an operational partner.