- Andreessen Horowitz, also known as a16z, released its first “state of crypto” report
- The new report will be a yearly evaluation of the crypto industry
- A16z is one of the most renowned venture capital firms in the world, focusing more recently on digital assets
Venture capital firm a16z is one of the hottest names in digital money right now. It has invested in the biggest blockchain companies over the last several years, including OpenSea and Bored Ape Yacht Club creator Yuga Labs. As one of the institutions most tuned into this booming asset class, investors are keen to see where its money flows next. Now, they will get a chance to peak under the hood with the new a16z crypto report.
Founded in the late 2000s, a16z is focused on cutting-edge tech. In its earliest years, the firm focused on tech stocks. It came to note after taking a sizable stake in Twitter (NYSE:TWTR), before moving on to companies like Meta Platforms (NASDAQ:FB) and Airbnb (NASDAQ:ABNB).
However, around the mid-2010s, the firm started to incorporate blockchain companies into its model. It made large investments into projects like Ripple and Coinbase (NASDAQ:COIN) around 2013 — far before the mainstream began turning to digital currency.
Nowadays, the firm has become a role model for crypto buyers. When the company made investments into projects like Axie Infinity (AXS-USD) or Yuga Labs, investors followed it. Indeed, when the Axie Infinity fundraise was announced, the AXS crypto saw its highest-volume trading period ever. It’s obvious that investors want to get into the mind of such a firm as a16z.
Well, with the company’s new a16z crypto report, these investors are getting better insight into the firm than ever before.
Landmark a16z Crypto Report Addresses Market Challenges
Yesterday evening, the firm announced its inaugural a16z crypto report. In this report, the company does give itself a pat on the back. It also addresses broad changes crypto is ushering in and ways the firm is predicting boom and bust cycles.
Of these takeaways, perhaps the most astonishing are the ways in which the crypto industry is different. For example, the report calls attention to how much kinder Web 3.0 projects are to creators than Web 2.0 counterparts. While Meta, Spotify (NYSE:SPOT) and YouTube pay out just a few cents for user interaction with creator content, Web 3.0 platforms allocated $174,000 per creator on average in 2021.
The document also lauds crypto’s real-world impacts. Andreessen Horowitz reports that the DeFi industry, which looks to serve underbanked users, would represent one of the world’s largest banks by total assets under management. It also points to well-meaning projects that seek to assist underserved users like Helium (HNT-USD), which provides internet at more affordable prices.
Finally, the a16z crypto report does theorize over where the market is heading. It notes Ethereum’s (ETH-USD) dominance, but also acknowledges that it faces challenges from other layer-1 networks. Looking at four different parts of the crypto market cycle — price, interest, new ideas and startups — a16z is hoping to predict the next boom period for the market.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.