a16z Crypto Fund Shrinks by 55% Yet Still Seeks New Capital; After Paradigm Shifts to AI, Who Will Safeguard Web3?

Author: Fortune

Translation & Compilation: TechFlow

TechFlow Intro: The largest player in crypto venture capital has launched a new fundraise just as Bitcoin prices have halved from recent highs. The target size has shrunk to less than half that of its 2022 fund. More notably, the industry ecosystem is fragmenting: Paradigm is pivoting toward AI and robotics; a Multicoin founder has departed; while a16z remains fully committed to blockchain—a high-stakes bet whose outcome will define who sets the agenda in the next crypto cycle.

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

Led by veteran investor and entrepreneur Chris Dixon, a16z crypto launched its inaugural $300 million fund in 2018—the year after the blockchain boom pushed Bitcoin’s price to $20,000. Each subsequent fund surpassed the prior one in size, culminating in the $4.5 billion mega-fund raised in 2022—a fund that continues to deploy capital today. Though the latest fund falls short of half that amount, one source noted that a16z crypto aims to shorten its fundraising timeline to capitalize on rapidly shifting crypto trends. Previous funds were spaced one to two years apart. (Kim Milosevich, Chief Marketing Officer of a16z crypto, declined to comment.)

This marks the firm’s fifth foray into digital assets—timed against a backdrop of weak crypto market performance, despite a recent rebound. Bitcoin has lost nearly half its value since hitting an all-time high in October, and publicly traded crypto companies’ stock prices have also tumbled significantly. Nonetheless, the industry is enjoying its most regulatorily permissive period in Washington in its 17-year history.

Read, write, own

When a16z launched its first crypto fund, digital assets were still a novelty to traditional investors. Yet this venture firm—and Dixon—helped channel institutional capital into the space, prompting numerous other major institutions to follow suit, including Paradigm and Haun Ventures, founded by a former a16z crypto general partner. Fortune reported last year that Haun is raising $1 billion across two new funds.

a16z crypto has backed several winners, including Anchorage (a crypto financial services company), Kalshi (a prediction market platform), and Uniswap (a decentralized exchange). However, other digital asset investors have questioned Dixon’s philosophical framework—summarized in his 2024 book Read Write Own. Dixon has long championed the “Web3” vision, arguing that blockchains can power decentralized versions of internet applications and underlying infrastructure—from social media platforms to lending protocols.

Yet many such projects have since faded—including Farcaster, an a16z-backed initiative building a decentralized Twitter. Earlier this year, after selling its infrastructure to another company, Farcaster announced it would return its entire $180 million raise to investors.

Meanwhile, the broader crypto industry has largely shifted toward purely financial projects centered on stablecoins and tokenization—or blockchain-wrapped versions of other financial assets. Even staunch crypto investors are pivoting. Kyle Samani, co-founder of Multicoin Capital, left the firm in February and stated he would focus on other technology sectors. As recently reported by The Wall Street Journal, Paradigm—a crypto VC founded by alumni of Sequoia and Coinbase—is raising up to $1.5 billion for a new fund that spans not only crypto but also AI and robotics. A Paradigm spokesperson declined to comment.

According to a knowledgeable source speaking to Fortune, a16z crypto’s fifth fund will be 100% focused on blockchain investments.

Dixon recently acknowledged on X that blockchain has entered its “financial era,” yet pushed back against claims that the “read write own” philosophy has failed. “Finance isn’t separate from the broader narrative—it’s part of it,” Dixon wrote. “It’s the foundation and proving ground for everything else.”

Even amid fundraising, a16z crypto continues making investments. Recent examples include Babylon—a decentralized protocol enabling users to collateralize Bitcoin positions; Kairos—a cross-platform integration tool for prediction markets; and a $50 million investment in Jito, a Solana staking protocol.