A16z Predicts Bright Future for Crypto Under Trump

The crypto division of the venture capital giant, Andreessen Horowitz’s (a16z), is among those predicting the incoming administration of Donald Trump bodes well for the web3 industry.

On Nov. 10, Miles Jennings, Michele Korver, and Brian Quintenz, legal and policy experts representing a16z, penned a blog post offering their predictions for what the U.S. regulatory landscape for crypto could look like when Trump retakes control of the Oval Office.

“The truth is that it’s too early to tell how everything will shake out, but what we do know is that it is significant for the industry,” a16z said. “We’re very optimistic that the government will now foster innovation, accelerate progress, and enable the crypto ecosystem to thrive in the U.S.”

A16z’s portfolio of crypto firms includes many of the industry’s largest, such as Coinbase, the largest U.S.-based exchange, the top NFT marketplace, OpenSea, and the pioneering automated market maker DEX, Uniswap.

A Path to Regulatory Clarity

A16z said they anticipate a shift from the hostile campaign of “regulation by enforcement” that characterized the Gary Gensler-led U.S. Securities and Exchange Commission (SEC)’s treatment of crypto throughout Biden’s term.

“The previous approach of regulation by enforcement, with no regulatory clarity, both blocked good actors and allowed bad actors, which actively harmed consumers and unfairly eroded trust in the space,” a16z wrote. “The future of crypto in the U.S. is bright – it’s the perfect time to build here.”

The firm noted that Trump’s pro-crypto stance, coupled with bipartisan progress from previous Congress sessions, lays a solid foundation for legislative advancements favoring the web3 industry.

“The good news is that there is now a pathway for constructive engagement with regulatory agencies and legislation that can bring regulatory clarity,” a16z stated.

However, the firm urged crypto founders to remain vigilant and strive to achieve decentralization wherever possible.

“Where there is trust, there is regulation,” the post said. “You should continue to focus on removing centralized aspects or dependencies on trust within your projects, as these are the areas that continue to attract regulatory scrutiny.”

The a16z post also addressed token-based projects, urging founders to capitalize on the regulatory shift.

“For many of you who have delayed using tokens to distribute control of your project and build community due to fears of regulatory overreach, you should now have greater confidence in your project’s use of tokens as a legitimate and lawful tool,” the firm added.

Looking ahead, a16z announced its upcoming guidance on Decentralized Unincorporated Nonprofit Associations (DUNAs), which aim to help projects navigate U.S. compliance, manage liability, and promote economic activity.

Trump’s crypto promises

Trump made multiple pledges to support the cryptocurrency sector throughout his election campaign. These included vowing to fire the SEC chair, Gary Gensler, halting government Bitcoin sales, and supporting the domestic Bitcoin mining sector.

At the Bitcoin2024 conference in Nashville, Trump promised that his administration would never sell off the U.S. government’s Bitcoin holdings. He further proposed creating a “strategic national Bitcoin reserve.”

A16z made significant contributions to pro-crypto political action committees during the months leading up to the 2024 U.S. presidential election.

On May 30, Chris Dixon, a16z’s managing partner, announced that the firm’s crypto and Web3 venture fund had donated $25 million to Fairshake, a PAC lobbying for the crypto sector. On Nov. 4, Dixon published a note revealing the firm contributed an additional $23 million to Fairshake, bringing a16z’s total donations to $70 million over the past two years.

Crypto markets soar

A16z is not alone in tipping that Trump’s presidency will be bullish for crypto, with the combined market cap of digital assets surging to new all-time highs above $2.9 trillion after gaining 24% in roughly one week.

Bitcoin posted new all-time highs above $82,000 earlier today, while the top 10 non-stablecoin cryptocurrencies posted gains of between $12% and 85% over the past seven days.