a16z Crypto "Surrenders" with a Rebrand as the Golden Age of Crypto Funds Comes to an End...

Original | Odaily (@OdailyChina)

Author | Golem (@web3_golem)



This year, the only top-tier VC still willing to stay and grind it out in crypto—a16z crypto—has also announced its surrender.

On October 23, Chris Dixon, co-founder of a16z and head of its crypto business, announced in a post that a16z Crypto will be renamed a16z Frontier, and its investment scope will expand from crypto startups to the broader frontier technology sector. The new fund will focus on AI and the new products and markets it spawns, including autonomous machines, hardware-software integrated startups, and new types of networks connecting humans and agents.

In May this year, a16z crypto had just announced the completion of fundraising for its fifth crypto-focused fund, with a scale of $2.2 billion. In this crypto winter, a fund of that size injected a certain amount of confidence into the crypto industry, but in just five months, a16z crypto's attitude has undergone a 180-degree turn.

Although Chris Dixon said that this adjustment in fund direction is merely an expansion, and that a16z Frontier will continue to invest in cryptocurrencies and related companies in the future and advocate for sound crypto regulation, in the long post published by Chris Dixon, most of the space is devoted to describing "we are in the midst of a major technology wave centered on AI" and the potential investment opportunities, with the description of Crypto reduced to only "blockchain will also play an important role in this transformation."

a16z may believe that it is no longer necessary to set up a dedicated fund for native crypto projects, and that in this cycle blockchain should serve AI—which is why it removed the "crypto" label. The native crypto fund has completely become a thing of the past.

Crypto-Native Innovation Has Long Been Scarce

The shift at a16z crypto also fits the characteristics of this cycle, because the mainstream narratives of this crypto cycle are RWA, stock tokenization, and payments. Even tracks like Perp DEX and prediction markets are integrating with traditional finance and reality. In fact, there are already no so-called purely innovative native crypto projects—in other words, crypto-native has entered a stage of innovation scarcity.

Even as a top-tier VC that serves as an industry bellwether, a16z crypto cannot change this trend. Since the closing of its fifth crypto fund in May this year, according to public information, a16z crypto only invested in two crypto projects in June (Canton Network and Ornn), and has had no public investment activity since then.

Canton Network is a privacy-focused L1 for institutional finance, and a16z crypto led its $355 million financing round; Ornn is not a crypto project but an AI project, a company dedicated to building a GPU computing power market and price index, and a16z crypto led its $33 million seed round.

Given a16z crypto's standing in the industry, virtually any crypto project it wants to invest in would not encounter obstacles. Even so, a16z crypto's fifth crypto fund invested in only one purely crypto project. This shows how difficult it is for VCs at this stage to find crypto-native startups worth investing in.

a16z is a VC dedicated to investing in "narratives." In 2011, Marc Andreessen proclaimed that "software is eating the world," kicking off a wave of investment in internet companies; in 2014, Marc Andreessen published a famous article in The New York Times, "Why Bitcoin Matters," in which he regarded Bitcoin as an innovative technology as important as the personal computer in 1975 and the internet in 1993, which prompted many traditional VCs at the time to re-examine the crypto industry.

Now, for a16z, it does not matter whether Crypto truly changes the world; what matters more is that Crypto's narrative value is becoming increasingly low. Chris Dixon expressed it more tactfully, saying that "when we started investing in Crypto, it was a self-contained world. But with the widespread adoption of blockchain, the boundaries have blurred. Wall Street and fintech companies now frequently launch blockchain-based products, but they are not crypto-native companies."

Web3, once hailed as the third-generation internet, has been submerged in the shadow of traditional finance and the new wave of AI technology.

How Can TGE Compare with IPO?

a16z crypto is not the first VC to stop focusing on crypto-native projects. Paradigm announced at the beginning of this year, when raising a new fund, that it would expand its investment direction to AI, robotics, and other frontier technologies. In fact, this trend had already taken shape in 2025.

But there is also a practical reason why VCs are abandoning their focus on crypto-native projects: the difference in investment exit channels. In the current market environment, the exit channels for native crypto projects are very narrow, and VCs can hardly build crypto-native projects with a $10 billion FDV. Meanwhile, crypto projects with PMF, when their revenue is self-sufficient, have little willingness to expand their business for the sake of going public or TGE.

Therefore, if VCs want to achieve "big results" in the crypto space in the coming years, the only things worth counting on are traditional financial companies or AI projects, not crypto-native projects.

On the one hand, the potential market size of crypto-native projects whose main business is crypto trading, DeFi, and the like is still too small—almost all products are built for the same user group, leaving too little room for growth; on the other hand, AI companies or fintech companies can hold IPOs in traditional financial markets at a scale of tens of billions of dollars, while today's TGEs in the crypto space can only reach a scale of hundreds of millions to a few billion dollars.

Crypto has not lost its value; it is just increasingly being treated as a feature rather than a product, and no VC is still willing to limit itself to such a small scope.