Venture funds investing in blockchain and cryptocurrency. Part 1

Written by Vladislav Akelyev
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Investing reporter
2   min.
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Venture funds investing in blockchain and cryptocurrency

Venture funds investing in blockchain and cryptocurrency have been actively developing over the past three years. At the moment, their number exceeds one hundred. They invest billions of dollars in projects and solutions based on cryptocurrencies and blockchain. Since the beginning of the year, the total market value of cryptocurrencies has grown exponentially. In the first quarter of 2021 alone, blockchain startups have accumulated more than $ 2.6 billion in venture funding, which is significantly more than last year.

Let’s take a closer look at this market. According to Crypto Fund Research, most funds are from the US (45 funds), followed by China (13 funds). Thus, half of the market belongs to these countries. The average size of the capital of funds is from 50 to 100 million dollars. However, with the growth of cryptocurrency capitalization, the number of unicorn funds, which have more than 1 billion assets under management, has increased.

Andreessen Horowitz, also known as A16Z, has already funded at least 50 crypto startups. This list is updated weekly, making A16Z the largest venture capital fund in the world. This summer, he launched a new $ 2.2 billion investment fund to capitalize on the rapid growth of cryptocurrency and the technological and financial architecture behind it. He is also a major investor in Coinbase, one of the largest cryptocurrency exchanges, and some new startups.

Andreessen Horowitz made the first crypto investment in late 2013 when the initial stake on Coinbase was $ 20 million. Andreessen soon wrote that Bitcoin created a new technological shift, like the PC in the 1970s and the Internet in the 1990s.

“Bitcoin offers opportunities to rethink how the financial system can and should work in the Internet age,” Andreessen wrote.

Coinbase went public in April, and Andreessen Horowitz’s stake was estimated at $ 11 billion. In 2018, the company launched its first cryptocurrency investment fund, raising $ 350 million. It was a separate legal entity to comply with securities regulations that limit venture capital firms’ contributions to riskier investments such as cryptocurrencies. No other crypto player in the regulatory arena has a roster that can rival the team that A16Z has put together.

During the presentation in Washington, the A16Z team members often spoke of their commitment to “democratizing” the Internet. They stated that the decentralized nature of cryptocurrency would make it easier for more people to access credit and investment through crypto platforms such as Compound and Uniswap, which Andreessen supports.

And they said the cryptocurrency would allow artists, musicians, and influencers to make money without intermediaries through A16Z-backed platforms like Open Sea, allowing them to sell their work using NFTs that prove ownership of a certain piece of art or music.

At the moment, our team is finishing work on a new investment portfolio that will copy the actions of A16Z on the market. The firm has created a second $ 515 million crypto fund in 2020 and a third $ 2.2 billion fund this year. So soon, you will be able to invest like the legendary A16Z!

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