Andreessen Horowitz to launch $2.2 billion cryptocurrency fund

Andreessen Horowitz Co-Founder and General Partner Andreessen speaks at the WSJD Live conference in California (Image credits: Reuters)

Silicon Valley firm Andreessen Horowitz (also known as a16z) announced a $2.2 billion cryptocurrency fund, making it the venture capital firm's largest vertical-specific fund ever.

"We are radically optimistic about crypto’s potential to restore trust and enable new kinds of governance where communities collectively make important decisions about how networks evolve, what behaviours are permitted, and how economic benefits are distributed," Andreessen general partners Chris Dixon, Katie Haun, and Ali Yahya said in a blog post.

Andreessen Horowitz is the biggest shareholder in Coinbase Global Inc, the largest U.S. cryptocurrency exchange. "The size of this fund speaks to the size of the opportunity before us: crypto is not only the future of finance but, as with the internet in the early days, is poised to transform all aspects of our lives," it said.

The firm had announced its first cryptocurrency fund in 2017 during a bearish movement in the market. Recently, the cryptocurrency market tumbled again however, the three partners emphasised that the "prices may fluctuate but innovation continues to increase through each cycle."

"We believe that the next wave of computing innovation will be driven by crypto," they wrote, adding that they’re "radically optimistic about crypto’s potential."

Cryptocurrencies have this year gained the backing of top-tier companies including BNY Mellon, BlackRock Inc, Mastercard Inc and Visa, sparking predictions that they will become a regular part of investment portfolios.

The venture capital firm also announced a host of new hires including Bill Hinman, the former director of the U.S. Securities and Exchange Commission's (SEC) division of corporation finance, will join its crypto arm as an advisory partner. Hinman has worked as the regulator's point man on cryptocurrencies.

Tomicah Tillemann, who served as a senior adviser to U.S. President Joseph Biden and two Secretaries of State and was chairman of the Global Blockchain Business Council, will join as global head of policy, Andreessen Horowitz said.

Brent McIntosh, who served as undersecretary of the Treasury for International Affairs and coordinated the G7's work on cryptocurrencies, will also join as an advisory partner.