Andreessen Horowitz raises $4.5 billion crypto fund to take advantage of bargains in down market

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Andreessen Horowitz plans to plow billions of dollars into crypto start-ups while digital asset markets are in a rut.

The Silicon Valley firm announced a new $4.5 billion fund for backing crypto and blockchain companies on Wednesday. It marks Andreessen's fourth fund for the asset class and brings its total raised for crypto and blockchain investments to $7.6 billion. The firm plans to invest in both the cryptocurrencies behind projects and in company equity.

Andreessen's first crypto-focused fund was launched four years ago, during a downturn now known as «crypto winter.»

«Bear markets are often when the best opportunities come about, when people are actually able to focus on building technology rather than getting distracted by short-term price activity,» Arianna Simpson, a general partner at Andreessen Horowitz told CNBC in a phone interview.

Cryptocurrencies have slid significantly from their all-time highs, with bitcoin down more than 50% since its November peak, and they remain tightly correlated to higher growth tech stocks, which have undergone a major slide this year. Earlier in May, the crash of stablecoin TerraUSD shook investor sentiment and caught the attention of regulators.

But Simpson said investors should not worry about the firm's bets.

«The technical diligence and the other kinds of diligence that we do are a key part of of making sure that projects meet our bar,» she said. «While our pace of investment has been high, we continue to invest really in only the top echelon of founders.»

Simpson and partner Chris Dixon liken the long-term opportunity in crypto to the next major computing cycle, after PCs in the 1980s, the internet in the 1990s and mobile computing in the early 2000s.

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