Silicon Valley-based venture capital firm Andreessen Horowitz is betting big on blockchain with a new $4.5bn crypto fund for start-ups.

It’s largest ever, the crypto fund includes $1.5bn for seed investments and $3bn for venture investments, bringing the firm’s total crypto funds raised to date to $7.6bn.

Andreessen Horowitz, also known as A16z, has been investing in crypto since 2013. Now, it believes that blockchain technology will be the next major revolution in computing.

Chris Dixon, managing partner and founder of Andreessen’s crypto arm, thinks that “we are now entering the golden era of web3” in which programmable blockchains are “sufficiently advanced” and a “diverse range of apps have reached tens of millions of users”.

“More importantly, a massive wave of world-class talent has entered web3 over the last year. They are brilliant and passionate and want to build a better internet,” he wrote, announcing the new crypto fund. “That’s why we decided to go big.”

Dixon said that A16z will use the fund to invest in promising web3 start-ups at every stage, including those developing web3 games, decentralised finance and social media, and NFT communities, among others.

This comes at a particularly turbulent time for the crypto industry. Cryptocurrencies across the board have plummeted in value in recent weeks, leading ECB chief Christine Lagarde to deem them “worth nothing” last week.

But Arianna Simpson, general partner at Andreessen Horowitz, thinks it is a wise decision to invest in a space during a period of downturn.

“Bear markets are often when the best opportunities come about, when people are actually able to focus on building technology rather than getting distracted by short-term price activity,” Simpson told CNBC.

We will also keep expanding the a16z crypto operating teams that provide world-class support to our founders, spanning research and engineering, security, talent & people, legal & regulatory, go-to-market, and a lot more.

— AriannaSimpson.eth (@AriannaSimpson) May 25, 2022

Last month, A16z said it was launching a new crypto research lab that aims to solve the biggest problems in the industry.

“Research labs like DeepMind and OpenAI have elevated the field of AI to new heights,” general partner Ali Yahya tweeted at the time. “We are setting out to do the same for crypto and Web3.”

Chris Dixon at TechCrunch Disrupt in 2015. Image: Noam Galai/Getty Images for TechCrunch via Flickr (CC by 2.0)

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