SAN FRANCISCO — Even with the cryptocurrency markets in an extended slump, the most prominent venture capital firm in the sector is doubling down.
Andreessen Horowitz, the well-known firm that made early bets on Instagram and Reddit, said on Monday that it was creating a $300 million fund focused exclusively on projects inspired by the original virtual currency, Bitcoin. One of the leaders of the new fund will the firm’s first female general partner, Kathryn Haun, a former federal prosecutor.
Last year, when Bitcoin and most other virtual currencies were gaining in value, most of the large venture capital firms began beefing up on cryptocurrency expertise and making investments.
Andreessen Horowitz was ahead of many of its peers. It was one of the first venture capital firms to begin dabbling in cryptocurrencies in 2013, when digital tokens were a fringe business.
Now, Andreessen Horowitz appears to be the first mainstream venture capital firm to offer an investment fund focused exclusively on cryptocurrencies.
The new fund — A16z Crypto — is being created at a difficult moment for the digital token markets. The price of Bitcoin has fallen by more than two-thirds since hitting a peak in December. Many smaller tokens have fallen much more than that as regulators have said that many cryptocurrency projects that raised money last year had most likely done so illegally.
Chris Dixon, who has been at the front of Andreessen Horowitz’s work on digital currencies, and who will be one of the leaders of the new fund, has been critical of many of the projects that raised money through so-called initial coin offerings last year.
But Mr. Dixon has argued that digital tokens provide a new way to fund and create decentralized software and protocols, like the those that are the foundation of the internet. Andreessen has already made investments in many tokens aiming to do this, including Filecoin and Basis.
“There are two axis of progress; there is genuine innovation and the prices,” Mr. Dixon said in an interview on Monday. “The prices got ahead of the genuine innovation. The metric I look at is: Are there great entrepreneurs coming in and building great projects? On that metric I think the space is in a really strong place.”
Since leaving the federal prosecutor’s office in San Francisco in 2017, Ms. Haun has taught classes on cryptocurrencies at Stanford University and joined the board of Coinbase, the largest virtual currency brokerage. Ms. Haun led the prosecution of the federal agents who stole money from the online black market, Silk Road, when they were supposed to be tracking down the leader of the site.
Andreessen Horowitz was one of the earliest investors in Coinbase. Mr. Dixon is on the board of the company, along with Ms. Haun.
