Andreessen Horowitz Launches $300 Mil Crypto Fund, Poaches Veteran Prosecutor

With the bitcoin price seemingly out of the doldrums for now, as evidenced by its rebound in the past 24-hour period to back above the $6,200 level, institutional investors are ready to roll. Most recently, Andreessen Horowitz, whose founder Marc Andreessen harkens back to the dot-com era, has launched a $300 million venture capital fund dedicated to cryptocurrencies dubbed a16z crypto fund.

A little bit about the fund. It will direct the capital toward backing cryptocurrency startups and protocols. Andreessen Horowitz has been investing in cryptocurrencies for years, but according to The Wall Street Journal, its asset allocation has been capped due to the design of the other investment portfolios. Considering that a16z will be dedicating to crypto, it doesn’t have to split the funds between asset classes.

Crypto Bull

Andreessen is clearly bullish on cryptocurrencies and the industry’s future, as his firm has vowed to hold onto its investments for at least one decade. Meanwhile, Blockchain Capital Partner Spencer Bogart said on CNBC today that the bitcoin price was currently trading at an attractive entry point, pointing out that there could be some near-term pressure as a function of redemptions by cryptocurrency hedge funds. But for the long term, Bogart, like Andreessen, is a crypto bull.

a16z crypto is described as an “all weather” fund, meaning that even if the cryptocurrency space suffers another “winter” season, “we’ll keep investing aggressively,” the fund documents indicate.

Crypto Regulation

Meanwhile, it appears that Andreessen’s venture capital firm is preparing for whatever regulation may be coming down the pike, as the firm has poached a top crypto prosector to co-lead the new fund alongside Chris Dixon. a16z crypto has tapped Katie Haun, a former U.S. Department of Justice official, as a partner. Haun has an impressive resume and is also on the board at U.S.-based crypto exchange Coinbase and security firm HackerOne.

Her experience and influence will give Andreessen Horowitz insight into how the government officials may decide to tackle regulation in the cryptocurrency markets, all of which will impact the bitcoin price. And as we’ve learned time and time again in 2018, including this past weekend, as the bitcoin price goes so too goes the value of the broader cryptocurrency market.

With firms like Andreessen Horowitz pouring capital into the cryptocurrency space, perhaps it can do something for dwindling trading volumes. According to data from Finder.com, trading volume across the 1,500-plus cryptocurrencies was approximately $94 billion this past week compared to more than $190 billion in April.

Featured image courtesy of Shutterstock

Author:
Gerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.