a16z crypto fund shrinks by 55% but still seeks fundraising, after Paradigm shifts to AI, who will safeguard Web3?

Market downturn defies the trend with fundraising, a16z Crypto’s fifth fund aims for $2 billion.

Author: Fortune

Translation: Deep潮 TechFlow

Deep潮 Guide: The largest player in crypto VC is launching a new fundraising round at a time when Bitcoin has halved from its high point, with the fund size shrinking to less than half of 2022’s fund. More noteworthy is the industry ecosystem’s divergence: Paradigm shifting focus to AI and robotics, Multicoin founder leaving, while a16z remains 100% committed to blockchain—who will win this bet will define the next crypto cycle.

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The biggest player in crypto venture capital has returned to the fundraising track. According to multiple anonymous sources told Fortune, Andreessen Horowitz’s blockchain division, a16z crypto, is currently raising its fifth fund, targeting approximately $2 billion, with plans to close before the first half of 2026.

a16z crypto, led by veteran investor and entrepreneur Chris Dixon, was established in 2018 with an initial $300 million fund, during the height of the blockchain boom when Bitcoin’s price surged past $20,000 the following year. Since then, each fund has grown larger than the previous one, culminating in a massive $4.5 billion fund in 2022—which is still actively investing. Although the latest fund is less than half that size, one source said a16z crypto plans to shorten its fundraising cycle to seize the rapidly changing crypto trends. Previously, the interval between funds was one to two years. (Kim Milosevich, a16z crypto’s Chief Marketing Officer, declined to comment.)

This venture capital giant is making its fifth foray into digital assets, amid a weak crypto market that has recently rebounded. Bitcoin has fallen nearly in half since hitting a record high in October, and publicly traded crypto companies’ stock prices have also plummeted. Nonetheless, the industry is enjoying its most lenient regulatory environment in its 17-year history in Washington.

Read, write, own

When a16z launched its first crypto fund, digital assets were still a novelty to traditional investors. But this VC firm and Dixon brought institutional capital into the space, followed by many large institutions including Paradigm and Haun Ventures, founded by a former a16z crypto general partner. Fortune reported last year that Haun was raising $1 billion across two new funds.

a16z crypto has backed several winners, including crypto financial services firm Anchorage, prediction market platform Kalshi, and decentralized exchange Uniswap. However, other digital asset investors have questioned Dixon’s philosophy—summarized in his 2024 book, Read Write Own. Dixon has long been an advocate of the “Web3” approach, promoting blockchain as a way to create decentralized versions of internet applications and infrastructure, from social media platforms to lending protocols.

Many of these projects have since faded away, including a16z-backed Farcaster—an effort to build a decentralized Twitter. Earlier this year, after selling its infrastructure to another company, Farcaster decided to return the $180 million it raised from investors.

Meanwhile, the crypto industry has largely shifted toward pure financial projects centered around stablecoins and tokenization, or offering blockchain-wrapped versions of other financial assets. Even staunch crypto investors are changing course. Kyle Samani, co-founder of Multicoin Capital, left the firm in February to focus on other tech sectors. According to a recent Wall Street Journal report, Paradigm, a crypto VC founded by Sequoia and Coinbase alumni, is raising up to $1.5 billion for a new fund that will focus not only on crypto but also on AI and robotics. Paradigm declined to comment.

Sources told Fortune that a16z crypto’s fifth fund will be 100% focused on blockchain investments.

Dixon recently posted on X (formerly Twitter) acknowledging that blockchain has entered its “financial era,” but rebutting claims that the “Read Write Own” philosophy has failed. “Finance is not separate from the broader macro narrative; it is part of it,” Dixon wrote. “It is the foundation and validation layer for everything else.”

During the fundraising period, a16z crypto has been continuously active. Recent examples include: supporting decentralized protocols like Babylon, which uses Bitcoin positions as collateral; cross-platform prediction market integration tools like Kairos; and a $50 million investment in Solana staking protocol Jito.