Do You Believe the Crypto Hype?

ONE SUMMER MORNING in 2014, I had an eye-opening breakfast with the prominent startup investor Jeremy Liew. The even-keeled—and ever-fashionable— partner at venture capital firm Lightspeed had by then developed a reputation for spotting trends early. Liew was the fi rst institutional investor to put money into Snapchat, betting on the app when it still had fewer than 100,000 users. (It now has nearly 300 million globally.)

As we sat down that day at the Battery, a trendy members-only club in San Francisco, I asked Liew about his latest fascination: Bitcoin, then trading below $500. “What do you make of it? Is it just hype?” I asked. Liew paused, then gave a measured response. Cryptocurrencies and the blockchain technology that powered them, he explained, were here to stay. Would Bitcoin continue to be the dominant digital currency? That remained to be seen.
He made a suggestion: If I had enough disposable income, Liew said, I should pour 1% of my savings into Bitcoin. If it went to zero, I wouldn’t be crushed. If it went to the moon, I’d be thrilled.
Fortunately, I followed Liew’s advice— and unfortunately, I sold most of my small Bitcoin stash a few years later when the price doubled. (Liew and Lightspeed went on to lead the first funding round into Blockchain.com and to invest in many other crypto names.)
Since then, Bitcoin has skyrocketed, then plummeted, then skyrocketed some more. And more recently, tumbled again. And per Liew’s prediction, there is no shortage of rival currencies that have launched in its wake.
Crypto has now become the hottest investment sector in the world. It is just as fascinating to the Reddit-devouring day trader as it is to Silicon Valley.
In 2021, venture capital funds globally sank $30 billion into crypto investments per PitchBook, with $7 billion of that coming from the U.S. That’s more than every previous year of crypto investing combined.
It appears the sector will only get more frenzied this year. Andreessen Horowitz, one of the most influential investors in the space, raised a $2.2 billion crypto fund back in June. And in December, one of the fund’s partners, Katie Haun, announced she was departing to create a huge crypto fund of her own.
For this magazine issue’s cover story, Fortune’s Michal Lev-Ram landed an exclusive sit-down with Haun about what led to her Andreessen departure, and how she plans to mobilize the new $1 billion fund she is raising to invest in the red-hot space.
Is Haun, a onetime powerhouse prosecutor turned VC, daunted by the prospect of launching her own venture firm focused on an industry as volatile as crypto? Not so much. As she tells Fortune, “The nature of running a crypto fund is taking on risk.” Wall Street, meanwhile, is buzzing about another trend sweeping through the Valley: the metaverse. The bulls, from Mark
Zuckerberg to Goldman Sachs, see it as a multitrillion-dollar opportunity. For more on why, read Bernhard Warner’s trenchant exploration of all things meta in this issue.
As with Bitcoin, when pondering an investment in the metaverse, it’s good to remember Liew’s wise advice: Don’t get scared off by the hype, but don’t get too carried away with it, either.

ALYSON SHONTELL
Editor-in-Chief, Fortune
@ajs
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