Renowned crypto investor, Andreessen Horowitz is optimistic about the development prospects of the sector. Despite chaotic growth cycles, the fundamental drivers of software innovation are there, he says.
At the end of April, a new crypto fund entered the market. Endowed with $ 515 million and launched by the famous investor Andreessen Horowitz, it aims to take advantage of the next growth cycle.
For his investment company a16z, the crypto and blockchain industry has experienced three main cycles of growth and innovation to date. And she expects a fourth. In a market analysis, the fund recognizes that the course of this industry has been marked by turmoil.
The projects of 3e cycle will trigger a 4th
"Even if the cycles of crypto seem chaotic, they have generated, in the long term, a constant growth of new ideas, codes, projects and start-ups "Nevertheless considers the a16z investment team.
"Technology experts and entrepreneurs will continue to advance crypto in the years to come," she adds. And to anticipate this future growth, Horowitz therefore bases itself on the three previous cycles observed.
"A key feature of crypto cycles is that everyone plants seeds which then grow and lead to the next cycle "Said the investor. And the last seeds would therefore have been sown during the last cycle, between 2016 and 2019.
"The third cycle, which peaked in 2017, is one where the broader implications of crypto have captured the attention of the general public. This cycle has again multiplied by around 10 the number of developers and start-ups in the field. Crypto has left the periphery to become a real start-up sector, ”analyzes a16z again.
Developers and startups multiplied by 10
To base its hopes on a fourth cycle, the investment fund relies on several indicators: Bitcoin growth, number of startups created, activity on social networks and contributions from developers.
The emergence of several major projects on the market during the period also constitutes a favorable indicator.
The 2017 cycle has spawned dozens of exciting projects in a wide range of areas, including payments, finance, gaming, infrastructure and web applications. Many of these projects will be launched in the near future, and could lead to a fourth cycle of crypto, ”said the VC.
However, the latter does not go so far as to predict the date of the next cycle. The investments made by the Crypto Fund II should, however, give indications as to the crypto applications that will drive the new growth cycle.
The a16z fund already has holdings that could act as indices: the exchange of YdX derivatives, the Dfinity cloud platform, from provider stablecoin Maker or even the "privacy-first" cloud actor Oasis Labs.