a16z: Why launch the Crypto Fund 5?

Authors: Chris Dixon, Ali Yahya, Guy Wuollet, Eddy Lazzarin; Source: a16z; Compiled by: Shaw, Golden Finance

Crypto market cycles often follow a fixed pattern. A wave of speculative fever draws everyone’s attention and brings a large influx of capital. Some of that capital is wasted in meaningless ways, while the rest is invested into building foundational infrastructure that can’t take off without such a fever. When the noise fades, what remains is often more practically valuable than it looks at the peak of the market—and more resilient and enduring than what it seems like at the market’s low point.

Set aside the appearance of coin prices, and in every cycle you can see the same rule: what has truly been built and delivered on the ground, and what people are still using after the heat dies down. We are in such a quiet moment after the commotion has ended, and the industry signals coming through right now are among the most encouraging in recent years.

Stablecoins are the most direct proof. Cryptocurrency trading volume swings with market conditions, but even in a bear market, the real scale of stablecoin usage continues to rise. People use stablecoins to save, make cross-border transfers, and pay for everyday expenses, which also reflects just how slow, expensive, and unreliable traditional alternatives are. The growth of stablecoins has long since shed any speculative character—it looks more like the straightforward, organic adoption of a network ecosystem: compounding growth in scale comes from the practical utility of the technology itself, not from trading expectations about coin price ups and downs.

Blockchain is also validating its value in the capital markets. Since the last cycle, the industry has made substantive progress: perpetual contracts have improved price discovery mechanisms, prediction markets help consolidate factual information, and on-chain lending supports the stablecoin credit market. Traditional assets are gradually being moved on-chain, and the service targets of on-chain finance are no longer limited to native tokens of public chains. A whole new financial system is taking shape: operating continuously 24/7, settling nearly instantly, at almost zero cost, and allowing anyone with an internet connection to participate without barriers,

Regulatory authorities are also moving in a positive direction. The GENIUS Act is a model of rational regulation: clear definitions, well-designed protective mechanisms, and room for innovation for developers at the same time. We expect that the crypto industry will also see more regulatory progress later on through legislation and rulemaking. This can both protect ordinary users—give entrepreneurs clear expectations—and pave the way for traditional mainstream institutions to enter the space.

Let’s pause and think: why is this moment particularly critical?

Software systems are becoming increasingly complex, and trust costs continue to rise. AI is powerful, yet much of it is a black box and lacks transparency. The concentration of monopoly in the underlying internet infrastructure has reached an all-time high. In such an environment, the core qualities inherent to crypto networks will only become more prominent—not decline:

• Transparent and verifiable systems;

• A naturally global network;

• An economic model that aligns the interests of users, creators, developers, and operators;

• Decentralized infrastructure that does not rely on a small number of intermediaries.

These qualities have already been translated into real products: payments, financial services, creator platforms, decentralized base-layer infrastructure, and brand-new collaboration and interaction patterns between humans and AI agents. A large portion of the innovations are built and led by startups, and they have also been widely adopted by financial institutions and technology companies to deliver services that are faster, cheaper, and more reliable.

At the practical application layer, this means: global transfers at the second level, holding USD assets without a bank, frictionless worldwide circulation enabled by asset tokenization, access to composable networks for others to build on, and embedding these capabilities into all kinds of application scenarios.

It has also given rise to entirely new models that were impossible before: users can directly control their assets and identities, with inviolable digital property rights; large numbers of AI agents can autonomously make decisions, take actions, and trade on behalf of users—calling on computing power, data, and all kinds of services as needed; and an increasing number of autonomous networks can automatically handle financing, governance, and ecosystem iteration through code.

That is why we are officially announcing the launch of Crypto Fund 5, tailored to this turning-point moment. We will use this $2.2 billion fund to support a group of entrepreneurs, focusing on sectors that are often overlooked during market cycles but are best positioned to crystallize long-term value: turning new infrastructure into mature products that ordinary people can use every day.

All influential computing platforms of this era ultimately find their footing through this path, and the crypto industry will be no exception.