Andreessen Horowitz plans $1 bln cryptocurrency VC fund

davis196

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Perhaps this will turn into a dream scenario where everyone that plays the crypto game will walk out a winner. Wouldn't that be great. Everyone in crypto wins. No one loses.

Nope,this is NOT how financial markets work.Not everyone will win from a crypto price boom.
The financial markets are a voluntary system for wealth redistribution.The profit of one trader is the loss of another.The wealth moves from the hands of the majority into the hands of a minority,which is skilled at trading(or has insider information).This is concentration of capital.That's how capitalism works.
Let's use the BTC market for example.
The newcomers will buy BTC at new ATH,then the price will crash,they will panic and sell way below ATH.
The HODLers/traders,who sell at ATH will make profits and buy cheaper BTC,after the price crashes.
Skilled traders/early adopters win.Newbies/newcomers lose.
There's no way everybody could win in this game.

justdimin

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Quote from: Hydrogen on May 04, 2021, 06:34:54 PM

It seems investment firms are still raising billions in capital to buy BTC and crypto. We may not yet have seen the ceiling.

What is key here is the motive behind it. Will they hold bitcoin as an inflation protected asset. Invest in less known crypto assets in the hope of generating revenue via growth. Is speculation a primary concern. Or are there other reasons.

Whatever the motive, I don't think anyone can deny crypto is exploding atm and everyone wants a piece of the action. Perhaps this will turn into a dream scenario where everyone that plays the crypto game will walk out a winner. Wouldn't that be great. Everyone in crypto wins. No one loses.

I believe this may not be strictly about "buying crypto". I might be wrong on this, but I feel like it could be about investing into crypto infrastructure isn't it? I mean that sounds like it makes sense to me, and there is a good amount of void in that market considering nearly all of USA market is cornered by coinbase and kraken, all the other smaller places are still waiting for their turn.

With a billion dollar fund you could fund like 100 of those places, eventually one of them making money, remember pancake.finance got like a million dollars only and they became pancake as we know it in less than a year, if this fund could find the next one? They could make a ton of money from it. Plus why would they try to raise money to buy crypto? They could simply buy it with whatever they have in their hands without needing any extra money coming in. I am not sure though, I might be wrong.

paxmao

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Sound quite interesting. The firms buying crypto for now a bit on the margins compared to the stock market. e.g. just one SPAC led by Bill Ackman has got twice as much to spend. Yet still is good news that crypto are seen as an alternative asset for those looking for strong returns and can cope with the extreme volatility of the cryptomarkets. With a long term view, we may be on an era of crypto becoming a trade tool of the big money compared to being a tool for some of the large wealth holders that were more entrepreneurial than average.

I hope this fund is the first of many more to come if the returns drive more people in.

fiulpro

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Reality is " People could very easily make profit if they keep holding for a longer period of time without selling in panic" BUT would you trust someone ? Would you trust the market ? Would you trust bitcoins ? Most of the times people think someway or the other some big investor will sell all their holdings and then it will be it.
Which seems true when you see people like Elon Musk in the market. They try and manipulate the market in every possibly way. Using social media and their following negatively. If people see such things happening for real in the market, this decreases the whole trust thing and makes them panic Everytime they see a dip, which might be true to an extent, we never know what the other person is planning.

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Quote from: Hydrogen on May 04, 2021, 06:34:54 PM

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Venture capital giant Andreessen Horowitz is looking to raise a fund of as much as $1 billion to invest in cryptocurrencies and crypto start-ups, the Financial Times reported on Friday.

April 30, 2021

The new fund is aiming to raise between $800 million and $1 billion from investors, the report said, citing people familiar with the matter.

Andreessen Horowitz did not immediately respond to a Reuters request for comment.

The news of the development comes as cryptocurrencies surge in value this year, with a clutch of top-tier firms including Tesla Inc (TSLA.O) diving into the space.

https://www.reuters.com/business/andreessen-horowitz-plans-1-bln-cryptocurrency-vc-fund-ft-2021-04-30/

....

It seems investment firms are still raising billions in capital to buy BTC and crypto. We may not yet have seen the ceiling.

What is key here is the motive behind it. Will they hold bitcoin as an inflation protected asset. Invest in less known crypto assets in the hope of generating revenue via growth. Is speculation a primary concern. Or are there other reasons.

Whatever the motive, I don't think anyone can deny crypto is exploding atm and everyone wants a piece of the action. Perhaps this will turn into a dream scenario where everyone that plays the crypto game will walk out a winner. Wouldn't that be great. Everyone in crypto wins. No one loses.

No, this is incorrect. AH is a venture capital adviser, in order to qualify under the venture capital exemption under the Investment Company Act, there are strict criteria the fund has to meet. Investing in cryptocurrency would not satisfy the exemption. AH is investing in crypto-related businesses, not crypto itself.

kryptqnick

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Crypto startups and Bitcoin are two very different things. So it might end up being an endorsement of scammers, a way to launder money or a way of focusing on everything but Bitcoin in hopes to make it weaker. They can focus on altcoins, on different blockchain use cases etc., so I think this news is not as good as Tesla investing in BTC used to be. It's vague and there is a good chance it's not going to help Bitcoin recover because it's not about seeing the potential of Bitcoin. Hopefully, it won't be bad for the market either, and it's nice that cryptos still attract institutional interest.

Daltonik

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The venture capital company Andreessen Horowitz (a16z) has announced the completion of the collection of investments for its third crypto fund with a total volume of $2.2 bln. Crypto Fund III has become the largest in terms of funds raised. https://a16z.com/2021/06/24/crypto-fund-iii/

Quote from: https://twitter.com/a16z/status/1408075457245990916

Wind_FURY

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Quote from: oHnK on May 06, 2021, 09:27:57 AM

Unfortunately their motive was not that sincere to hold BTC for a long time. In fact, those who have come only to take huge profits are in the current hype. Say it is Elon Musk who has sold his BTC when the price has gone up because of the hype he built. Now he's making the market unhealthy by continuously pumping prices into coin memes. The market has been so unhealthy lately. Many people profit at the expense of others.

Haha. That has never changed. Bitcoin requires the free market, a market of buyers and sellers, for price discovery. The whole community of plebs, OG miners, and old investors already front-run the billionaires, and can sell their coins and profit at the bilionaire’s expense.

TheGreatPython

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Yes, we are yet to see the highest price yet, the price of bitcoin has shown resilience at the current price rate, and it’s still showing signs that it will move up again. I wasn’t expecting it hold on this much longer, I was thinking that by now the price have crashed to a lower rate as it did before, but it seems that’s not the case as it keeps on hanging this high price for a long time. And now there is this news about a giant institution planning to raise billions of dollars and invest them in Bitcoin.

This shows that there are many other institutions that will be looking for funds to invest in Bitcoin, but since they have not come out publicly to say it, people wouldn’t know that. And this is a trend that will keep growing in years to come.

oHnK

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Unfortunately their motive was not that sincere to hold BTC for a long time. In fact, those who have come only to take huge profits are in the current hype. Say it is Elon Musk who has sold his BTC when the price has gone up because of the hype he built. Now he's making the market unhealthy by continuously pumping prices into coin memes. The market has been so unhealthy lately. Many people profit at the expense of others.

Wind_FURY

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Quote from: dothebeats on May 05, 2021, 04:51:48 PM

Big names and deep pockets are already setting up plans for the inevitable future of cryptocurrencies. Today we may see $1B as something so big for a market front that is still considered growing, but in the future when we look back when the cryptocurrency market has been established—enough to rival and better the traditional asset scene—this $1B will be a drop in the ocean. Nonetheless, good for Horowitz to be able to contribute to start-ups and crypto in general. Most companies are directly investing in crypto, but not enough attention on the infrastructure and services around has been given lately.

It’s a new VC fund for him. I believe he already has investments in some Bitcoin companies which both were successes and failures, and some investments in shitcoin projects, like the NEAR Network, which isn’t successful during the current bull cycle.

Quote from: magneto on May 05, 2021, 05:07:30 PM

Quote from: Hydrogen on May 04, 2021, 06:34:54 PM

It seems investment firms are still raising billions in capital to buy BTC and crypto. We may not yet have seen the ceiling.

What is key here is the motive behind it. Will they hold bitcoin as an inflation protected asset. Invest in less known crypto assets in the hope of generating revenue via growth. Is speculation a primary concern. Or are there other reasons.

Whatever the motive, I don't think anyone can deny crypto is exploding atm and everyone wants a piece of the action. Perhaps this will turn into a dream scenario where everyone that plays the crypto game will walk out a winner. Wouldn't that be great. Everyone in crypto wins. No one loses.

I highly doubt that these VC funds are going to be looking at BTC as a purely inflation hedge.

They'll likely try to chase high growth and high revenue through angel investing into highly risk crypto ventures - buying and holding alone is probably not going cut it for the rate of growth that they are targeting.

Or chase Bitcoin startups with high growth potential. After each bull cycles, most shitcoins are forgotten. Why invest in that?

magneto

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Quote from: Hydrogen on May 04, 2021, 06:34:54 PM

It seems investment firms are still raising billions in capital to buy BTC and crypto. We may not yet have seen the ceiling.

What is key here is the motive behind it. Will they hold bitcoin as an inflation protected asset. Invest in less known crypto assets in the hope of generating revenue via growth. Is speculation a primary concern. Or are there other reasons.

Whatever the motive, I don't think anyone can deny crypto is exploding atm and everyone wants a piece of the action. Perhaps this will turn into a dream scenario where everyone that plays the crypto game will walk out a winner. Wouldn't that be great. Everyone in crypto wins. No one loses.

I highly doubt that these VC funds are going to be looking at BTC as a purely inflation hedge.

They'll likely try to chase high growth and high revenue through angel investing into highly risk crypto ventures - buying and holding alone is probably not going cut it for the rate of growth that they are targeting.

I'm not too sure how he plans on getting $1b in funding though - institutional investors probably won't be able to take this type of risk, whilst for retail investors they seem to prefer to speculate on crypto assets themselves.

wiss19

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Invest into cryptocurrencies and crypto startups are two very different things. Tesla invested 1.5 billion dollars into bitcoin, and even though that was a huge news and increased the price it was due to Tesla being a huge corporation, microstrategy bought bitcoin as well and only we got to hear about it, regular people mostly didn't.

So, the point here is that if he invests into crypto startups that is going to be awesome because we need those kinds of companies. Look at USA for example, coinbase is basically handling more than half of all crypto transactions there, and we definitely need one that needs to be competing with them to get some market, there are many small ones but they are nothing at all, so Andreessen could maybe fund one that could go bigger, mainly marketing is what companies need. So startups are good, but if buys crypto, not so good.

dothebeats

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Big names and deep pockets are already setting up plans for the inevitable future of cryptocurrencies. Today we may see $1B as something so big for a market front that is still considered growing, but in the future when we look back when the cryptocurrency market has been established—enough to rival and better the traditional asset scene—this $1B will be a drop in the ocean. Nonetheless, good for Horowitz to be able to contribute to start-ups and crypto in general. Most companies are directly investing in crypto, but not enough attention on the infrastructure and services around has been given lately.

hugeblack

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Quote from: Hydrogen on May 04, 2021, 06:34:54 PM

Quote

Venture capital giant Andreessen Horowitz is looking to raise a fund of as much as $1 billion to invest in cryptocurrencies and crypto start-ups, the Financial Times reported on Friday.

Quote from: Hydrogen on May 04, 2021, 06:34:54 PM

It seems investment firms are still raising billions in capital to buy BTC and crypto. We may not yet have seen the ceiling.

I think you misunderstood the title that it is about crypto start-ups and not investing in cryptocurrencies.
Hearing the word 'cryptocurrencies' has become popular and some investment funds respond to clients ’desire to diversify their investment portfolios, but this does not mean buying bitcoin or investing in it. its includes NFT, DeFi, Gaming,...etc and all the modern things that cryptocurrency market has reached.
I don't think a large chunk of 1 billion will appear as an order for Bitcoin.

The Sceptical Chymist

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Quote from: Hydrogen on May 04, 2021, 06:34:54 PM

What is key here is the motive behind it. Will they hold bitcoin as an inflation protected asset. Invest in less known crypto assets in the hope of generating revenue via growth. Is speculation a primary concern. Or are there other reasons.

I have no idea what the motive is behind all this big-money investment, but in most cases I wouldn't think it would be to protect money from inflation--there's no guarantee any crypto is going to do that, and usually investors flock to the precious metals market if they're just looking for an inflation hedge.

Crypto is way more speculative and isn't a safe-haven asset class. On the other hand, companies like MSTR are viewing bitcoin as a better alternative to cash, so who knows? Someone linked to this website that lists all the large institutional (and private) investment in bitcoin, which I find very interesting. I happen to think that a lot of this is just people following an upward trend rather than any real faith in bitcoin as an alternative to cash, stocks, or other investments for the long term.

Should be interesting to see what the altcoin market does. So far this year, a lot of alts have been booming, and that's good to see. When bitcoin and alts go up at the same time, it indicates to me that a lot of new money is pouring into the entire crypto space.

paxmao

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There are quite a few announcements of bitcoin and cryptofunds. As I said many times when people questioned if Wall Street would adopt bitcoin or the investment institutions would like to take part, they will do as their clients say. Even plenty of 2018 and 2020 are hype, it is a hype appreciated by the large wealth owners across the globe and that is something that investment banking never ignores.

https://bitcointalksearch.org/topic/m.56764940

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Quote from: avikz on May 05, 2021, 06:24:33 AM

More corporate spending means more centralization of cryptos. It is not really favorable for commoners like us in long term. Venture capital funds are seeing more profit from cryptospace and crypto related startups, so they are sniffing for opportunities.

It might sound good for now but in long term, cryptos will not benefit the common people like us if its control goes to the hand of money hungry corporates. There's no liquidity issue in the market, so we don't really need corporate funds here!

Define centralization first. IMO, centralization occurs when an entity or an individual decides who can use a specific service and who needs to be shut out. Even if the institutions managed to own 90% of the cryptocurrency, they will not be able to prevent any specific individual from using Bitcoin. The idea of centralization doesn't work in the cryptocurrency sector, similar to how it works with fiat currency. Therefore I don't think that individual investors need to worry too much about the entry of institutions.

avikz

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More corporate spending means more centralization of cryptos. It is not really favorable for commoners like us in long term. Venture capital funds are seeing more profit from cryptospace and crypto related startups, so they are sniffing for opportunities.

It might sound good for now but in long term, cryptos will not benefit the common people like us if its control goes to the hand of money hungry corporates. There's no liquidity issue in the market, so we don't really need corporate funds here!

Wind_FURY

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Doesn’t Anderseen Horowitz currently have a VC fund, or funds that have invested on some Bitcoin companies, and some shitcoin blockchain networks? There was a network called NEAR that “A16Z” have already invested in. Why the new VC fund?

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