Following the news that Andreessen Horowitz has launched a $4.5 billion cryptocurrency fund, despite the bear market*;

Members of the Thematic Team at GlobalData, a leading data and analytics company, offer their view:

Andreessen Horowitz is a major venture capital firm. Its large cryptocurrency fund makes it a ‘crypto whale’, an individual or group that holds large amounts of cryptocurrency.

George Monaghan, Thematic Analyst at GlobalData, comments:

“A recent report from Cardify found that few crypto investors fully understand the value and potential of crypto. Sentiment alone can precipitate huge market swings, while the fundamentals of the asset and environment remain unchanged. So-called ‘crypto whales’ like Andreessen Horowitz operate with a steady, slow hand. Andreessen has not abandoned its investment plans because of the recent crypto market plunge. It’s also unlikely that its new fund was formed because of last year’s boom. Crypto technology existed long before the plunge or the boom, and these investments are based on the perceived soundness of the technology, not the anticipated caprice of the market.”

Amrit Dhami, Thematic Analyst at GlobalData, adds:

“Andreessen’s move isn’t that surprising when we look at the broader crypto landscape and what authorities are doing to create ecosystems that accommodate crypto assets without curbing their markets. Government intervention in this area can help make cryptocurrencies more mainstream as a payment option, as regulation fosters consumer trust. The UAE, the UK, and Singapore are already committed to creating crypto hubs, and the US is also hinting at crypto regulation. The relocation of crypto firms such as Bybit and Crypto.com to Dubai in light of new regulation suggests that some regulation is indeed welcome in the sector.”

Dr. Lil Read, Senior Analyst at GlobalData, a leading data and analytics company, offers her view:

“Much of crypto (including DeFi, NFTs, and broader Web3 themes) will be decentralized, with control of user interactions transferred from big tech to decentralized networks. However, the control needs to go somewhere. For now, it is largely in the hands of Andreessen Horowitz. This is not new news to those in the know and has been central to discussions between Elon Musk and Jack Dorsey.”

David Bicknell, Principal Analyst at GlobalData adds, “While others worry about a crypto winter, it’s nearly summer and Andreessen Horowitz has both the hood and the pedal down. Crypto regulation may be on the way, but Andreessen Horowitz will worry about that when it happens. It’s betting big and bold here.”

* A bear market is when the stock market drops in value by 20% or more from its recent highs