A16Z Crypto, the crypto-focused venture capital arm of Andreessen Horowitz, is reportedly seeking around $2 billion for its fifth crypto fund..
The increase comes as venture capital firms also face increasing pressure as the overall cryptocurrency market endures a downturn.
a16z cryptocurrency reduces fund size with blockchain-focused round towards 2026
The company aims to close the round by the end of the first half of 2026, according to Fortune. This fifth fund will focus exclusively on blockchain investments.
The latest fund is significantly smaller than a16z crypto’s fourth $4.5 billion fund. BeInCrypto reported in 2022 that the fund was split into $1.5 billion for seed and $3 billion for venture investments.
However, this time, a16z crypto is opting for a shorter funding cycle to take advantage of rapidly changing trends in the cryptocurrency space.
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In 2018, a16z crypto launched its first $300 million fund and has since become active in the market. According to CryptoRank data, in Q4 2025, the company backed Kalshi and invested $50 million in Solana staking protocol Jito. This year, the company invested in Babylon, Kairos, and Talos.
As a Tier 1 investor with a 22.08x retail ROI, a16z owns 187 investments averaging $10-20 million per round, building one of the broadest portfolios in cryptocurrency venture capital.
The company’s investment focus areas include artificial intelligence (27.78%), prediction markets (16.67%), and APIs and developer tools (11.11% each).
a16z isn’t the only company raising money. Just last month, Dragonfly Capital closed a $650 million fund. This shows the continued appetite of institutional investors to invest in cryptocurrency ventures.
Cryptocurrency venture capital fund faces “identity crisis” amid market battles
The broader cryptocurrency market is facing challenges, continuing a decline that began in October. Bitcoin (BTC) is down 16.7% year-to-date despite a recent rally. Other major large assets are also experiencing struggles.
The impact of this economic downturn has affected digital assets, government bonds, crypto stocks, and even venture capital funds. Bloomberg reported in early February that venture capital funds focused on cryptocurrencies were facing what it called an “identity crisis.”
According to the report, crypto-native funds are shifting their focus to higher-performing sectors such as stablecoin infrastructure and on-chain prediction markets. Some companies expanded into adjacent industries such as fintech and artificial intelligence (AI).
“Web3 as a category is almost uninvestable at the moment. People have moved on from NFTs, gaming, and the next step-up DeFi platforms built for themselves. Even crypto-native VCs with dry powder are pivoting hard into fintech, stablecoin plays, and prediction markets. Everything else is struggling to gain traction,” said Santiago Roel Santos, founder and CEO of crypto private equity firm Inversion.
However, a16z’s continued efforts suggest that the company believes there is an opportunity for long-term value creation in the current environment.
The answer to whether the latest efforts signal a bottom for crypto ventures or consolidation among the sector’s most durable players will depend largely on whether the current market downturn produces the kind of breakout companies worthy of the capital deployed during it.
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