The typical traditional media portrays digital assets as a gambler’s paradise, pointing out the market is prone to volatility unseen in any traditional market. This has been a key deterrent to new retail adoption, as those unfamiliar with market take for word the claims of major media titles.
However, a new report contradicts the claim that cryptocurrencies are unusually volatile for anything classified as a viable investment vehicle.
Andreessen Horowitz, a leading venture capital company, has published a major market analysis that demonstrates that cryptocurrencies may not be as volatile as mass media tends to portray them.
The firm published a report on May 15 that analyzed three cycles of crypto, accounting for regional peaks in 2010, 2013, and 2017. The report has revealed that starting from 2010, the compound annual growth rates to the present exhibit ”choppy yet consistent growth in key metrics” that would be associated with a viable investment vehicle.
“The 2017 cycle spawned dozens of exciting projects in a wide range of areas including payments, finance, games, infrastructure, and web apps,” states the report.
Andreessen Horowitz asserts that market sentiments were the main fuel for prior three crypto bull runs. However, Andreessen Horowitz marked that innovative startup projects are rising to form a “fourth crypto cycle,” and that this trend could see a further surge given Bitcoin’s recent rally.
The VC pointed:
“Even though crypto cycles look chaotic, over the long term they’ve generated steady growth of new ideas, code, projects, and startups — the fundamental drivers of software innovation. Technologists and entrepreneurs will continue to push crypto forward in the coming years. We are excited to see what they build.”
Initial Crypto Investment of a16z
Ana.vc, a venture capital researcher, has published a report, recording a near 57% month-on-month fall in crypto funding from VCs in April,
DeFi platforms were successful in attracting most VC interest. This is understandable given the rapid surge in interest in DeFi from retail users. This has turned DeFi applications into the few cashflow positive products in the blockchain space. Investors hungry for innovative solutions in new technological frontiers are turning to DeFi developments for diversification and new opportunities.
Andreessen Horowitz (a16z) leads the market in terms of investment. The firm has funded several crypto and blockchain projects, including an extremely lucrative investment in Coinbase. The firm has also turned its eyes on DeFi, with major stakes in Maker (MKR), Synthetix, and various other developments that offer decentralized lending and trading solutions.
Andreessen Horowitz is one of the most successful VCs from the traditional tech sector. It’s growing presence as a lead investor in seed and early stage token and equity rounds of token sales has drawn interest from other funds.
With the recent surge in Bitcoin price, the market could be poised for a new rally in investments allotted to decentralized projects.