On May 5, the cryptocurrency branch of venture capital firm Andreessen Horowitz, a16z Crypto, officially announced the completion of fundraising for its fifth fund, Fund 5, with a total size of 2.2 billion dollars.

The size of this fund is significantly smaller than the record-setting 4.5 billion dollars of Fund 4 in 2022,a16z Crypto communications partner Paul Cafiero stated that the company intends to return to a smaller fund size because “a shorter fundraising cycle allows us to keep up with the constantly changing crypto trends.”

This choice has its realistic context. Fortune magazine previously cited SEC filing data revealing that by 2025, the management scales of top crypto venture capitals such as Paradigm, Pantera, and a16z Crypto are all contracted. Among them, the total management scale of a16z Crypto’s four funds decreased by nearly 40% from 2024 to 2025, dropping to about 9.5 billion dollars, partly due to the institution beginning to return capital to the LPs of early funds.

The entire crypto VC ecosystem has seen a significant increase in fundraising difficulty over the past two years, with funds concentrating towards the top, and scale reduction is the most direct response to market realities.

Looking back, the historical fund sizes of a16z Crypto are as follows: the first fund in 2018 was 350 million dollars, the second fund in 2020 was 515 million dollars, the third fund in 2021 was 2.2 billion dollars, and the fourth fund in 2022 was 4.5 billion dollars. This fifth fund returns to 2.2 billion dollars, which is equal to the third fund in 2021.

According to RootData data shows that based on past investment patterns, a16z Crypto has participated in 253 rounds historically, with a portfolio of 183 projects and leading rounds 150 times. In terms of sector distribution, infrastructure accounts for the highest percentage at 37.7%, followed by gaming (13.1%), and DeFi (12.5%), with representative projects including Coinbase, Solana, Uniswap, Ripple, Phantom, Kalshi, and LayerZero.

Image Source:RootData

The four GPs of a16z Crypto stated that the crypto market is currently in a quiet phase, but adoption signals are improving.In each cycle, the infrastructure left after the speculation tide recedes is often more valuable than at the peak and more sustainable than at the trough.

They listed three key signals. The first is stablecoins, where transaction volumes fluctuate with market ups and downs, but the use of stablecoins continues to grow even during bear markets, widely used for cross-border remittances, savings, and daily payments, with this growth being more driven by network effects rather than price expectations.

The second is the maturity of on-chain financial infrastructure, where perpetual contracts are used for price discovery, prediction markets for information aggregation, and on-chain lending services stabilize the stablecoin credit market, with traditional assets starting to go on-chain, extending the scope to beyond crypto-native assets.

The third aspect concerns regulation, with a16z Crypto holding a positive attitude towards the GENIUS Act, believing it provides developers with a clear compliance space and expressing optimistic expectations about the Clarity Act passing this year.

Based on this, a16z Crypto stated that the new fund will invest in projects that can transform new infrastructure into products for everyday use—this is the part of the cycle that receives less attention but will generate more long-term value.

In terms of investment areas, the fund will be 100% focused on investments in the crypto space, without expanding into adjacent fields such as AI or robotics. a16z Crypto's reasoning is not to avoid AI, but because they believe the AI era makes crypto even more indispensable.

They pointed out that software is becoming increasingly complex and difficult to trust, AI systems are powerful but operate with opaque logic, and the high concentration of internet infrastructure allows the risk of single points of failure to continue to accumulate.

In this context, the core attributes of crypto networks have become even more valuable: systems are transparent and verifiable, networks are inherently global, economic models align the interests of users and developers, and infrastructure does not rely on a few intermediaries.

These characteristics have already manifested in real products in fields such as payments, financial services, creator platforms, and decentralized infrastructure, gradually being adopted by financial institutions and technology companies.

At the same time, a series of previously impossible new models are emerging: users can directly hold assets and identities, possessing inviolable digital property rights; a large number of software agents can autonomously make decisions and trade on behalf of users, independently acquiring computing power, data, and services; autonomous networks can achieve self-financing, governance, and evolution through code.

In other words, they do not directly enter the AI track but bet that the development of AI will in turn drive demand for crypto infrastructure. Specifically, they are betting on stablecoins, on-chain finance, and the underlying tracks of the AI agent economy.

This contrasts with judgments from some peers. Reportedly, Paradigm is seeking to raise up to 1.5 billion dollars for a new fund, planning to directly expand its investment range to AI and robotics. Haun Ventures, meanwhile, while completing 1 billion dollars in fundraising for a new fund, has listed AI agents as one of its core investment directions.

These two strategies represent different bets by top institutions on the next cycle: one side believes the intersection of crypto and AI offers greater opportunities, while the other believes focusing on crypto itself is sufficient, as the AI wave will eventually flow back to the chain.

Additionally, Dragonfly recently completed its fourth fund raising, totaling 650 million dollars, and Blockchain Capital is also raising about 700 million dollars. The intensive fundraising completion by top institutions suggests that a new round of project investments will start in the upcoming months.

Clearly, this round of funding bets on the transition of crypto from the infrastructure construction phase to the real user adoption phase, whether choosing to focus on crypto or cross into AI, these real investments will only flow to those that can turn technology into tangible products.