Editor's Note: a16z crypto announced the raising of a $2.2 billion new fund. On the surface, this appears to be another significant inflow of funds into the crypto primary market. However, what this article really wants to emphasize is not another bull market narrative, but the fact that the crypto industry is shifting from a "price cycle" to a "utility cycle."
Over the past few cycles, the crypto industry has always seen capital and attention driven by speculation first, followed by the emergence of some genuinely usable infrastructure after the bubble burst. a16z's assessment is that we are currently in a relatively quiet but more worth observing stage: the market sentiment is no longer as noisy as at the peak of a bull market, but applications such as stablecoins, on-chain finance, prediction markets, on-chain lending, and asset tokenization are continuously proving their actual value.
The most typical example is stablecoins. Their use has not disappeared as the market cools down; instead, it continues to grow in scenarios such as cross-border transfers, savings, and payments. This means that stablecoins are becoming less like a speculative tool and more like a new financial network: people use them not because they expect the price to rise but because there are still significant gaps in speed, cost, and accessibility in the traditional financial system.
Similar changes are also taking place in on-chain finance. Perpetual contracts, prediction markets, on-chain lending, and bringing traditional assets on-chain are transforming blockchain from a "token issuance tool" into a new financial infrastructure. Its advantage lies not only in the decentralization narrative but in more concrete efficiency: continuous operation, near-instant settlement, low costs, and openness to all interconnected users.
Furthermore, a16z places crypto in the broader context of the transformation of AI and internet infrastructure. As software systems become more complex, AI more opaque, and internet infrastructure more centralized, networks that are transparent, verifiable, globally open, and independent of a few intermediaries become even more crucial.
Therefore, this $2.2 billion fund is not betting on short-term market trends but on whether the crypto infrastructure can enter the stage of everyday products. For the industry, the most critical question in the next phase is no longer "will the price rise" but whether these technologies can truly be continuously used by people and become part of finance, creator platforms, AI agents, and digital property systems.
Below is the original text:
The crypto cycle often follows a similar pattern: a wave of speculation brings attention and capital, some of which is wasted, while the rest flows into infrastructure that may not have been possible to build before. When the noise fades, what is left behind is usually more useful than it appeared at the peak and more enduring than it seemed at the trough.
If you look beyond the price at each cycle, you will see this: what has truly been built? What are people still using after the frenzy has passed? Right now, we are in a relatively quiet moment. And the signal being transmitted at this moment is one of the most encouraging signals we have seen in the past few years.
The clearest evidence is stablecoins. While transaction volumes may fluctuate with the market, even in a bear cycle, the usage of stablecoins continues to rise. People use stablecoins for savings, cross-border remittances, payment for goods and services, scenarios that often expose how slow, expensive, and unreliable traditional alternatives are. The growth of stablecoins looks less and less like speculation and more like network adoption: the volume continues to compound because the technology itself is useful, not because people are expecting price appreciation.
Blockchain is also proving its worth in the capital markets. Since the last cycle, we have seen substantial growth in several areas: perpetual contracts for price discovery, prediction markets for revealing true information, and on-chain lending revolving around stablecoin credit markets. Traditional assets are starting to move on-chain, and on-chain finance is no longer just serving native tokens but is being used for a wider range of asset types. A new financial system is taking shape: one that can operate continuously, settle almost instantly, have costs close to zero, and be open to anyone with internet access.
Regulation is also moving in the right direction. The GENIUS Act is a prime example, showcasing what prudent policy can look like: clear definitions, robust protection mechanisms, while preserving innovation space for builders. We expect that other areas of the crypto market will also see more regulatory progress through legislation and rule-making. This will provide consumer protection, offer certainty to builders, and pave the way for mainstream institutional participation.
We should also take a step back and consider why this is particularly important right now.
Software is becoming increasingly complex and harder to trust. AI systems are powerful but largely opaque. The infrastructure on which the internet operates is more centralized than ever. In such an environment, the attributes that crypto networks were originally designed to provide are becoming more important, not less:
· Transparent and verifiable systems;
· Globally connected networks from day one;
·An economic model that aligns the interests of users, creators, developers, and operators;
·Infrastructure that doesn't rely on a few intermediaries.
These attributes are now being manifested in real-world products: payments, financial services, creator platforms, decentralized infrastructure, and new ways for humans and machines to coordinate. Many such products are being built by startups and increasingly adopted by financial institutions, tech companies, and other organizations to offer faster, cheaper, more reliable services.
In practice, this means people can send instant global payments, can hold dollars without relying on a bank, can tokenize assets for frictionless movement anywhere; it also means accessing composable networks, enabling others to build on top, and embedding these capabilities into various applications.
It also includes new models previously unachievable: users can directly own their assets and identity, enjoying sovereign digital property rights; clusters of software agents can make decisions, take actions, and transact on behalf of users, tapping into compute, data, and services along the way; and increasingly autonomous networks can self-fund, self-govern, and continuously evolve through code.
This is why we are announcing the launch of the new Crypto Fund 5: it is designed for this moment. With this $2.2 billion fund, we will support founders who are working on the less attention-grabbing but, in our view, more value-creating parts of the stack: turning new infrastructure into products people will use every day.
Every major computing platform has ultimately had its impact in this way. Crypto will too.
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