Andreessen Horowitz has opted to go deeper into the blockchain space with a third fund aimed at supporting blockchain startups.
The fund is looking to raise as much as $2.2 billion for blockchain investments, and based on the last two funds from the firm – it will have zero trouble attracting capital.
In addition to being able to raise funds on a large scale, Andreessen Horowitz has picked some winning companies over the past few years.
It backed Dapper Labs, which makes NBA Top Shot, and gained a more than $7 billion valuation earlier this year.
The simple fact is that regardless of Bitcoin or Ethereum’s market price on a day-to-day basis, there is a lot of money looking to enter the blockchain space – and why not?
Announcing Crypto Fund III, our new fund to support the next generation of visionary crypto founders across all stages.
Read more from General Partners @cdixon and @katie_haun on what’s next for a16z Crypto. https://t.co/HEYq0eNupC
— a16z (@a16z) June 24, 2021
Andreessen Horowitz is Good at Being Right
The fine folks at Andreessen Horowitz didn’t get to where they are by being dummies.
While many Wall St. firms were blasting blockchain technology, Andreessen Horowitz was launching its first two blockchain funds – and growing its total amount of investment capital.
It looks like it has been successful at both showing investors it knows how to enter a new space and create returns, but it is curious that there is still so much anxiety surrounding blockchain and cryptos in general.
Anyone who lived through the Dot.Com boom/bust remembers how silly it got when the year 2000 rolled around.
Pets.com is a common example, but it is one of many companies that had zero to offer investors, especially at million-dollar valuations.
Maybe Look at Other Areas of the Market
We are increasingly driven by how we feel about an idea – for example – do I like the fact that inflation is picking up – and prices will likely rise substantially over the coming decade.
Most people – the author included – would say ‘no’.
However, the fact that central banks and governments have gone totally wild with monetary theory, may be worth a look. This isn’t a popularity contest – it is real life.
With real inflation topping 8% p.a. in the USA (grow up – the government stats are a poor excuse for reality) it is only a matter of time until real problems manifest both in the established financial markets – as well as the physical economy.
With inflation running so hot, one would be forgiven for thinking that bond yields would be on the rise. Add to that massive government spending – and it seems like we should be staring down double digit yields on long-dated government paper.
But no – that isn’t the case at all.
Yields are low. People are lining up to buy debt from one of the most indebted nations in human history, and they don’t want to make much in the way of a return.
More Gains Coming in Blockchain
Blockchain has two great drivers behind it – first – it is an amazing technology that can be used in numerous ways. Secondly – blockchain was originally designed to deal with value, which is becoming a very curious thing.
Andreessen Horowitz clearly understood the value in concepts like NFTs well before the rest of the investment community, and as these markets develop, more booms are coming.
Today, people are happy to pay with ‘real’ money for digital items like NFTs, which unlike Bitcoin, have no intrinsic value on a crypto exchange.
The growth of markets to serve security tokens has been limited by regulations, but make no mistake, the day when STOs replace IPOs is coming.
The next decade will be amazing to see!
With so many investors still wondering when the next post WW2 boom is going to hit the Western economies – and why anyone would want digital assets – the rise of Bitcoin to $20,000 – and then to $60,000 – will probably seem like the pre-game warm up.