A16z crypto fund shrinks by 55% and still needs to raise funds, who will defend Web3 after Paradigm turns to AI? 】 Author: Fortune Compilation: Deep Tide TechFlow Deep Tide Introduction: The largest player in encrypted VC has launched a new round of fundraising at a time when Bitcoin is at a high point of decline, with the scale shrinking to less than half of the funds in 2022. What deserves more attention is the differentiation of the industry ecology: Paradigm turned to AI and robots, the founder of Multicoin left, and a16z insisted on 100% betting on the blockchain - the outcome of this bet will define the next encryption cycle the final say. The biggest player in the field of cryptocurrency venture capital has returned to the fundraising track. According to multiple anonymous sources, Andreessen Horowitz's blockchain division a16z crypto is currently raising its fifth fund, with a target size of approximately $2 billion, and plans to complete the fundraising before the end of the first half of 2026. A16z crypto, led by veteran investor and entrepreneur Chris Dixon, established its first $300 million fund in 2018, the year after the blockchain boom pushed Bitcoin prices to $20000. Since then, the size of each fund has exceeded that of the previous period, until the $4.5 billion mega fund in 2022, which continues to invest to this day. Although the latest issue is less than half of that number, according to a source, a16z crypto plans to shorten its fundraising cycle in order to seize the window of rapidly changing cryptocurrency trends. Previously, the interval between each fund was one to two years. Kim Milosevich, Chief Marketing Officer of a16z crypto, declined to comment. ）This venture capital giant is entering the digital asset field for the fifth time, coinciding with the weak performance of the cryptocurrency market, despite a recent rebound. Bitcoin has fallen by nearly half since reaching a historic high in October, and the stock prices of listed cryptocurrency companies have also plummeted significantly. Nevertheless, the industry is enjoying the most relaxed regulatory environment in its 17 year history in Washington. When Read, Write, Owna16z established its first cryptocurrency fund, digital assets were still a novelty in the eyes of traditional investors. But this venture capital firm and Dixon introduced institutional funds into this field, followed by several 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 through two new funds. A16z crypto has thrown out multiple winners, including cryptocurrency financial services company Anchorage, predictive market platform Kalshi, and decentralized exchange Uniswap. However, other digital asset investors have questioned Dixon's philosophy, which was summarized in his 2024 book 'Read Write Own'. Dixon has always been an advocate of the "Web3" route, advocating that blockchain can create a decentralized version of Internet applications and underlying infrastructure, from social media platforms to lending agreements. However, many of these projects have fallen silent, including Farcaster invested by a16z - a project that is building a decentralized Twitter. Earlier this year, after selling its infrastructure to another company, Farcaster decided to fully return the $180 million it raised to investors. At the same time, the cryptocurrency industry has generally shifted towards pure financial projects centered around stablecoins and tokenization, or other financial assets that offer blockchain packaging. Even staunch cryptocurrency investors are turning their attention. Multicoin Capital co-founder Kyle Samani left the company in February this year and stated that he will focus on other tracks in the technology field. According to a recent report by The Wall Street Journal, Paradigm, a cryptocurrency VC founded by Sequoia and Coinbase alumni, is raising up to $1.5 billion for a new fund that not only focuses on cryptocurrency but also covers the fields of AI and robotics. A spokesperson for Paradigm declined to comment. According to a source familiar with the matter, the fifth phase of a16z crypto fund will be 100% focused on blockchain investment. Dixon recently acknowledged in an article on X that blockchain has entered its "financial era," but refuted the claim that the "read write down" philosophy has failed. Finance is not detached from a more macro narrative, it is already a part of it, "Dixon wrote." It is the foundation and validation ground for everything else. "During the fundraising period, a16z crypto's investment activities continued. Recent cases include Babylon, a decentralized protocol that helps users use Bitcoin positions as collateral, Kairos, a cross platform integration tool for predicting markets, and a $50 million investment in Jito, a Solana staking protocol.