Andreessen Horowitz (a16z), a venture capital firm known for its huge investment in crypto and blockchain, has suffered significant losses on its paper gains following the market collapse and crashing valuations of crypto firms.

a16z's first crypto fund debuted in 2019 and it went down in value by 40% in the first half of 2022 was investors saw the world's biggest cryptocurrency, Bitcoin (BTC), dip as low as $17,708, reported Wall Street Journal.

The firm's fourth crypto fund was worth $4.8 billion and it was the biggest one to date. Although a16z has record cash in hand, it has considerably slowed down its investments this year.

People familiar with the matter and who had invested in the flagship fund told WSJ that the decline in a16z's crypto fund is much larger as compared to other VC funds, which were down by 10-20% as they avoided getting carried away with risky practices.

While the fourth crypto fund is quite large for a sector that is experiencing a sluggish phase, Chris Dixon, who heads up a16z's crypto unit, aims to convince investors that the firm hasn't made unnecessary investments.

"What I look at is not prices," Dixon said. "I look at the entrepreneur and developer activity. That's the core metric."

Dixon said he remains faithful when it comes to the crypto and Web3 industry. He also added the industry is still in its early stages and that he doesn't know when the mass adoption of blockchain technology will occur.

Crypto "is about the political and governing structure of the internet," he said. "We have a very long-term horizon."

Interestingly, a16z recently relaunched its Crypto Startup School and will offer $500,000 to each startup that enrolls in the program.

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