Cryptocurrency expert Andreessen Horowitz believes that the fourth cryptocurrency bull cycle is upon us, and it will be driven by high-quality projects in the industry.
High-Quality Projects to Usher in Crypto Bull Cycle
Andreessen Horowitz, a famous venture capital investor, recently launched a new $515 million crypto fund. He revealed that he believes that the introduction of high-quality projects within the cryptocurrency industry will drive the new growth cycle in the sector.
In a post on Friday, the VC fund stated that it expects the innovative projects following the 2017 ICO boom to lead the way in ushering in the new cryptocurrency bull cycle. Andreessen Horowitz, while looking into the data surrounding the previous bull runs of 2013 and 2017, highlighted that the bull cycles started with price increases that attracted new innovators with bright ideas. These people end up creating exciting companies and projects that benefit the cryptocurrency sector at large.
According to the blog post, the key feature of cryptocurrency cycles is that each one plants seeds, which later grow and drive the next cycle. As such, the new projects will inspire more people to venture into the cryptocurrency industry, which culminates in the next cycle. Ethereum, which was created following the 2013 cycle, became the foundation for the ICOs that led to the market growth of 2017.
The VC fund now predicts that the various projects launched during the last cycle in areas such as payments, finance, games, infrastructure, and web apps will grow bigger, and many of them will drive the fourth cryptocurrency cycle.
Big Investment In the Cryptocurrency Space
The blog post comes roughly three weeks after the venture capitalist firm revealed that its new Crypto Fund II surpassed the initial $450 million fundraising target. The company is launching with $515 million in total and intends to invest everything in the cryptocurrency space.
Unlike the first fund launched by Horowitz in 2018 that focused on general investment prospectus within the cryptocurrency space, the VC firm revealed that the new fund would target specific sectors within the cryptocurrency industry. They would be investing in areas like decentralized finance (DeFi), next-generation payments, and Web 3 (the concept of a decentralized internet).
A general partner at the company Chris Dixon and the co-author of the latest blog post mentioned that cryptocurrencies have gone through several waves of changes. “With each new wave, the applications of crypto extend to a greater number of categories, and more visionary entrepreneurs enter the space,” he stated.
Despite its optimism about the next cryptocurrency cycle, the VC firm did not predict when the event would happen. However, the VC firm has probably invested in a lot of the projects that could play a crucial role in the next boom of the industry.
Over the past few years, the firm has invested in projects like stablecoin provider Maker, derivatives exchange dYdX, cloud computing platform Dfinity and “privacy-first” cloud platform Oasis Labs. All four of these projects are in a16z’s active portfolio.
The next cryptocurrency bull cycle could see the prices of Bitcoin and other digital currencies experience a massive surge as there will likely be an increase in the demand for these cryptocurrencies.