Cryptocurrencies were experiencing a nice rebound on Thursday after feeling pressure earlier in the week. The broader stock market is up, and tech stocks, in particular, are moving higher, which generally helps cryptocurrencies. But the bigger news was about a new venture capital fund being raised by Andreesen Horowitz.
Bitcoin (CRYPTO: BTC) was the biggest cryptocurrency to make a significant gain Thursday: It was up by 4.1% at one point in the last 24 hours and at the time of this writing is trading 3.4% higher. Ethereum (CRYPTO: ETH) rose by as much as 4.8% and is now up 3.9%, while Dogecoin (CRYPTO: DOGE) was up by as much as 4.7% and is currently 2.6% higher. Crypto.com Coin (CRYPTO: CRO) was up by as much as 9% and is currently 8.4% higher for the day.
The biggest news on the cryptocurrency front actually came out of Russia, where the country's central bank and the Federal Security Service (FSB) have called for a ban on trading cryptocurrencies, and that ban may extend to mining crypto as well. Many crypto mining operations have set up shop in the country. China was the first major country to ban cryptocurrencies. For numerous reasons, it wouldn't be surprising to see Russia follow a similar path.
Cryptocurrencies would like a bigger global audience, but the market clearly doesn't see Russia's actions as something to worry about right now.
More consequential news came from venture capital firm Andreessen Horowitz, which is reportedly interested in raising $4.5 billion for new Web 3.0 and cryptocurrency funds. Initial reports indicate that a $3.5 billion fund will be dedicated to traditional venture investments in companies building for Web 3.0 and the cryptocurrency environment, while $1 billion will be invested in digital tokens.
Andreessen Horowitz has already been one of the most successful cryptocurrency investors to date, and this could solidify its position as the biggest player in this emerging industry.
The news out of Russia is generally a negative for cryptocurrencies, but not surprising. However, I would recommend paying more attention to the moves Andreesen Horowitz makes in the space. The firm has been a key player in helping to build out infrastructure for cryptocurrency and NFT trading, but this investment round could take its involvement to another level.
Long term, the reason I'm bullish on cryptocurrencies generally is the underlying innovation and utility that can be built on these platforms. And the cryptocurrencies that developers are building applications on are the ones that will be successful long term. That's at least one reason the crypto market is moving higher Thursday.
Volatility certainly plays a role as well. The crypto market continues to be volatile, but also correlated with the broader stock market overall. With the market heading higher Thursday, it's not surprising that some of the biggest cryptocurrencies are rising as well.
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