According to the Coinmarketcap, the total market capitalization of all cryptocurrencies stands at nearly $530B. This is remarkable in comparison to $18B at which it started in 2017. Bitcoin and other cryptocurrencies seem to be even more engaging for various investors.
Among them appear to be investors of the four highest valued social media companies, Facebook, Groupon, Twitter, and Zynga. It is about such VCs as Andreessen Horowitz and Union Square Ventures, which first placed bets with cryptocurrency business in 2013.
The secrets of Andreessen Horowitz
Founded in 2009, Andreessen always focused on investment into technologies. Thus, it is not surprising that after investing into Skype and, later, in Facebook and Twitter, the firm showed interest in Bitcoin (Earn, Coinbase) as well as in the private blockchains for financial services, which are Axoni and Ripple. The choice of Earn, however, was not accidental. Balaji Srinivasan, who founded Earn, was a former influential partner at Andreessen. Andreessen took part in two rounds to Earn, totaling $116M.
How Union Square Ventures succeeded
USV firm is known for investing in Foursquare, Twitter, and Kickstarter. It made its first bet on popular cryptocurrency exchange Coinbase at the beginning of 2013. Later this firm has broadened its tactics and started betting on new blockchain use cases. Among them are OpenBazaar and Filecoin. This year Filecoin increased to the worth of $200M in its ICO.
In general, together Andreessen and USV have taken part in nine deals since they got involved in cryptocurrency investment in 2013. A few of these cases were cheered by media. For example, this summer Coinbase joined the unicorn club at a valuation of about $1.6B, when MediaChain was bought by Spotify in spring. Both Andreessen and USV invested in cryptocurrency hedge funds as equity investors and deployed capital as limited partners. Therefore, they received a wider exposure to token markets.