Andreessen Horowitz weighs in on Bitcoin cycles


A well-known capital firm, Andreessen Horowitz a.k.a. “a16z,” is weighing in on predictive cryptocurrency analysis with an outlook on past cycles that have fueled bigger price spikes for Bitcoin and other top digital assets.

“The famous venture capital fund, which has a substantial crypto portfolio, said in a post Friday it anticipated some of the better projects created in the wake of the 2017 initial coin offering (ICO) boom to contribute to a new industry boom period,” writes Paddy Baker at Coindesk. “Pulling from ‘anecdotal’ evidence and data going back 10 years, a16z says ‘price innovation cycles’ – including those that peaked in 2011, 2013 and 2017 – begin with price increases that attract new people with bright ideas who end up creating promising companies and projects that benefit the space overall.”

Talking about these three prior cycles, a16z is evaluating how each one laid the groundwork for the one coming next. For example, Baker’s piece, pulling from a16z insights, points to Ethereum itself, with its top coin and blockchain smart contract potential, as something that came out of the 2013 cycle and helped to fuel subsequent activity in 2017.

Meanwhile, as of press time, Ethereum stands above its $200 mark that acts as a fulcrum for so many traders, and Bitcoin is holding steady at $9600 after going through its long-awaited miner block reward halving Tuesday.

“Similarly to how the values of foreign currencies react to monetary policy decisions by central banks, analysts are expecting the value of Bitcoin to react to the halving,” writes Nick Chong at Forbes, qualifying this by talking about the various potential outcomes in a market that is nothing if not volatile.

Nonetheless, quite a few investors are betting on the BTC halving to raise up Bitcoin’s value eventually. Many long-term buying holders are also focused on the kinds of evolutions that a16z is talking about – they’re looking at government and business offices becoming early adopters of blockchain technologies, and making the assumption that this is going to translate into larger cryptocurrency values in the years to come. Here’s a16z’s prediction:

“The 2017 cycle spawned dozens of exciting projects in a wide range of areas including payments, finance, games, infrastructure, and web apps. Many of these projects are launching in the near future, possibly driving a fourth crypto cycle.”