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  • Andreessen Horowitz, a venture capital firm, has released a report outlining three different cycles of crypto over the past decade. 
  • The firm is “excited to see” what tech and crypto entrepreneurs will build

Venture capital company, Andreessen Horowitz (a16z), has recently released a report outlining the trends and movements that have emerged from the crypto industry over the last ten years. The report entails an analysis of three cycles of crypto in relation to the industry’s four key metrics of activity. The metrics include – the price of Bitcoin to the US dollar, social media activity from data collected by PushShift.io, developer activity from data collected by GitHub’s API and startup activity in the industry. 

According to the report, the first cycle took place between 2009 and 2012 with a peak in 2011. With respect to this cycle, the report calls Bitcoin “an interesting experiment.” 

Afterwards, entrepreneurs realized you could create businesses in crypto. This was when many of today’s largest exchanges, miners, and wallets were founded.

The second cycle took place between 2012 and 2016, with a peak in 2013. The report highlighted that this was a period in which most individuals outside of the tech industry took an interest in the concept of digital currency, as per Andreessen Horowitz. 

This cycle brought roughly 10x more developers and startups into the space. It was also when important projects were created and funded, most notably Ethereum, which drove a lot of the excitement in the third cycle in 2017. A key feature of crypto cycles is that each one plants seeds which later grow and drive the next cycle.

The third cycle happened between 2016 and 2019, with a peak in 2017. This cycle shows an increase in all four metrics, as per the report. 

Crypto moved from the fringe to become a bona fide startup sector.

The report concluded:

Even though crypto cycles look chaotic, over the long term they’ve generated steady growth of new ideas, code, projects, and startups — the fundamental drivers of software innovation. Technologists and entrepreneurs will continue to push crypto forward in the coming years. We are excited to see what they build.