Andreessen Horowitz On Crypto Entrepreneurs: “Excited To See What They Build”


Venture capital (VC) firm Andreessen Horowitz recently released a report on the movements and trends emerged from the cryptocurrency industry over the past decade.

In the report, three cycles of cryptocurrency are analysed in relation to four key metrics of activity in the industry. The report considers (1), the price of Bitcoin to the US dollar, (2), social media activity from data collected by, (3), developer activity from data collected by GitHub’s API, and (4), startup activity in the industry (comprised by companies which raised their first round of financing in “Cryptocurrency/Blockchain” on Pitchbook). From these driving metrics, three cycles are represented:

The first peaked in 2011, the second in 2013, and the third in 2017″ and they “appear chaotic but have an underlying order” according to the four metrics.

Cryptocurrency Cycle One

The VC’s report shows the first cycle taking place between 2009 and 2012 with a peak in 2011. The report characterises the first cycle showing Bitcoin as “an interesting experiment”.

The report further states:

“Afterwards, entrepreneurs realized you could create businesses in crypto. This was when many of today’s largest exchanges miners, and wallets were founded.”

Cryptocurrency Cycle Two

According to Andreessen Horowitz, the second cycle took place between 2012 and 2016, with a 2013 peak, offering that this was a time in which most individuals outside of the tech industry took note of the concept of the digital currency, stating:

“This cycle brought roughly 10x more developers and startups into the space. It was also when important projects were created and funded, most notably Ethereum, which drove a lot of the excitement in the third cycle in 2017. A key feature of crypto cycles is that each one plants seeds which later grow and drive the next cycle.”

Cryptocurrency Cycle Three

Between 2016 and 2019, with a 2017 peak, the third cycle proposed by the VC shows an increase in all four metrics. The report states:

“Crypto moved from the fringe to become a bona fide startup sector.”

A Zoomed Out Look On The Cryptocurrency Industry

The VC offered a zoomed look at the industry, showing the different peaks and cycles. From the chart, it’s that the industry saw a massive boom in the third phase across all four metrics.

Cryptocurrency Bitcoin cycles of growth

The report concluded on an optimistic note, suggesting:

“Even though crypto cycles look chaotic, over the long term they’ve generated steady growth of new ideas, code, projects, and startups — the fundamental drivers of software innovation. Technologists and entrepreneurs will continue to push crypto forward in the coming years. We are excited to see what they build.”

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