Andreessen Horowitz launches $4.5 billion crypto fund and sees the market downturn as an opportunity to capitalize on the 'golden era' of web3

• Andreessen Horowitz on Wednesday launched a $4.5 billion crypto fund, the fourth such one from the famed venture capital firm.
• The firm will put funding toward developments in blockchain-based projects involving DeFi, privacy, DAOs, among others.

Andreessen Horowitz is furthering its bet on the crypto world with the Wednesday launch of a $4.5 billion fund for blockchain-based projects, and the venture capital firm views the current market slide as an opportunity to expand the next iteration of the internet.

For its fourth crypto fund, the firm, also known as a16z, will allocate $1.5 billion to seed investments and $3 billion to venture investments. The company has now raised more than $7.6 billion earmarked for crypto and web3 investments.

"We think we are now entering the golden era of web3. Programmable blockchains are sufficiently advanced, and a diverse range of apps have reached tens of millions of users," a16z general partner Chris Dixon said in a statement, adding that the firm wants to work with others to build a "better" internet.

Web3 in part envisions the next phase of the internet as primarily powered by blockchain technology.

Andreessen said it will direct its new pool of funds toward bolstering developments in Web3 games, decentralized finance and social media, decentralized autonomous organizations, NFT communities, and privacy.

The launch comes during a rough period for the cryptocurrency market, which has seen a selloff in bitcoin and the collapse of algorithmic stablecoin TerraUSD and its sister cryptocurrency Luna. The value of the broader crypto market has dropped by about $1 trillion during 2022 to $1.3 trillion as of Wednesday, according to CoinGecko.

"What we've seen is that many of the best protocols and companies are actually built during periods of market instability or downturns," Arianna Simpson, general partner at Andreesen, told the Financial Times in a report published Wednesday. "Because it really allows people to focus on the technology and building rather than being distracted by short term price fluctuations."

Andreessen Horowitz has been an early investor in Facebook, Twitter, Coinbase, Airbnb and Stripe.