This year is a hard time for the VC company Andreessen Horowitz (a16z) since its flagship crypto fund has shrunk by more than 40% in the first half of this year. The fourth crypto fund of this firm was established in May with $4.5 billion.
According to the statement of the firm, $1.5 billion was allocated to seed investments while the remaining $3 billion would be earmarked for venture investments.
However, the value decreasing like a16z is not a single case, but a prevalent phenomenon in the bear market of recent year. The tycoons in this field like bitcoin and ether have suffered an loss of more than 70% of their values since the fourth quarter of 2021.
Solana, which was purchased by a16z in June 2021, has dropped 80% this year, and it results in a loss of $2.9 billion. Therefore, some of the major crypto startups, which are funded by a16z, have been wiped out permanently.
Even though the situation for a16z as well as the whole crypto market is extremely harsh, the 50-year-old a16z partner Chris Dixon still remains optimistic. According to the interview with WSJ, he indicated that his company have a very long-term horizon.
“What I look at is not prices. I look at the entrepreneur and developer activity,” Dixon said. “That’s the core metric.” And remains hopeful that mainstream adoption will see a16z’s high stakes crypto bets pay off.
Nevertheless, there are also a lot of different voices which show the doubt about the outlook of a16z crypto. The senior reporter of TechCrunch and co-host of Chain Reaction Pod Jacquelyn Melinek claimed why is it ok for a16z’s crypto fund to lose 40%, but when her portfolio is down 40%, she is considered a bad investor. The co-founder of Starpoint LLP commented that a16z went into crypto at the worst possible time.
Despite the bitter winter in crypto market and tremendous loss in business, the a16z still launches new programs for the crypto startups, such as the Crypto Startup School which will be held in Spring 2023. The program is designed for the specific needs of webs startups, and the participants will have chance to get funding from a16z crypto, mentorship from industry founders, lectures from domain experts, and the opportunity to build alongside a select group of fellow cofounders who are navigating the startup terrain together.