PANews reported on May 5th that a16z published an article stating that the crypto industry cycle typically follows an evolutionary path of "speculation - construction - accumulation": funds and attention pour in during peak periods, some of which are wasted, but they also drive the construction of critical infrastructure; when the bubble bursts, what remains are often more practical and valuable results in the long term.
a16z believes that the current market is in a relatively "cooling-off phase," but the underlying development signals are among the most positive in recent years. Among them, stablecoins are considered the clearest example: although trading volume fluctuates with the market, their usage has continued to grow during the bear market, and they are widely used in savings, cross-border payments, and daily transactions, exhibiting a natural expansion similar to a "network effect."
In the field of on-chain finance, perpetual contracts, prediction markets, and on-chain lending are also developing continuously. At the same time, traditional assets are gradually being put on-chain, driving the formation of a new financial system that is "operating around the clock, with near real-time settlement, low cost, and globally open".
Positive progress has also been made on the regulatory front. a16z points out that policies such as the GENIUS Act are providing clearer definitions and protection frameworks, which help improve consumer safety, enhance developer certainty, and pave the way for mainstream institutions to enter the market.
a16z further emphasizes that, against the backdrop of increasingly complex and opaque AI systems and highly centralized internet infrastructure, the characteristics of encrypted networks, such as "verifiability, global openness, incentive alignment mechanisms, and disintermediation," are becoming increasingly critical. These capabilities are already beginning to manifest in practical applications such as payments, financial services, the creator economy, and decentralized infrastructure.
a16z stated that the newly launched $2.2 billion Crypto Fund 5 is based on this judgment and will focus on supporting entrepreneurs who transform underlying technologies into everyday usable products.
