a16z Report: Cryptocurrency Sector is in Better Health than Prices Suggest


  • Venture capital firm Andreessen Horowitz (a16z) has published its second ”State of Crypto” report.
  • The report claims that the crypto industry is in much better condition than what price fluctuations suggest.
  • The VC firm has also announced the “State of Crypto Index” to help track the health of the crypto industry.

Andreessen Horowitz (a16z), a top venture capital firm that has backed some of the leading projects in the emerging technologies industry, has released its second edition of the “State of Crypto report”.

The Silicon Valley based VC giant claims that the cryptocurrency sector is healthier than what the current market prices indicate.

In the report, a16z researchers Daren Matsuoka, Eddy Lazzarin, Robert Hackett and Stephanie Zinn wrote: “In the period marked by our now-annual State of Crypto report, it would be easy for a casual observer to overlook the rapid progress the crypto industry is making. Major infrastructure improvements like The Merge – a milestone achievement in decentralized and open source development – simply don’t make headlines as often as high-profile bankruptcies, busts, and flameouts.”

Crypto “healthier” than the story prices tell

This second edition of the report comes after a period of turbulence for crypto in 2022, with the collapse of cryptocurrency exchange FTX the low point for the industry in terms of its impact as a setback.

Crypto prices decreased towards the end of the year before making a decent recovery in the first quarter of 2023. About this, the Andreessen Horowitz report states it is easy to disregard the overall development across the industry.

In specific, the researchers focus on Web3 technology at the latest intersection of this trajectory.

Our 2023 report aims to address the imbalance between the noise of fleeting price movements – and the data that tracks the signals that matter, including the durable progress of web3 technology. Overall, the report reflects a healthier industry than market prices may imply, and a steady cycle of development, product launches, and ongoing innovation,” the report states.

a16z also unveiled the “State of Crypto Index,” which it says is an interactive tool to help people “track the health of the crypto industry.” According to the VC firm, the tool focuses on innovation and technological advances, rather than on the financial aspect of the industry.

The index will give a nuanced measure of what crypto development entails, looking at 14 industry metrics, including total authenticated smart contracts, active addresses, DEX volume, transacting wallets and active developers among others.

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