'Transcends Boundaries': Former US Justice Department Attorney Says Cryptos Will Give 'Power to the People'

  • General partner at Andreessen Horowitz thinks cryptocurrencies may allow the 2 billion unbanked population to participate in the global economy. 
  • Andreessen Horowitz's a16z crypto fund takes a "very long 7 to 10 year view" on digital assets. 

Kathryn Haun, a general partner at venture capital firm Andreessen Horowitz and former federal prosecutor at the US Justice Department (DOJ), will reportedly be managing the Silicon Valley company’s recent $15 million investment (6% ownership stake) in MakerDAO - a stablecoin project developed and deployed via the Ethereum blockchain.

Giving "Power Back To The People"

With its multi-million dollar investment, Andreessen Horowitz’s cryptocurrency fund (a16z) has directly acquired a large amount of Maker Coin (MKR), which is a cryptocurrency issued by the MakerDAO project.

Owning MKR coins reportedly allows investors to play a role in the decision making process related to MakerDAO’s ongoing development. Commenting on the “powerfulness” of cryptocurrencies in her recently released profile on Fortune, Haun said:

Cryptocurrency is powerful because it puts the power back into the hands of the user … [and] transcends all boundaries.

Kathryn Haun

Having a strong legal background, the Stanford University law school graduate (JD) noted that Andreessen Horowitz “likes to encourage responsible innovation.” Going on to reflect on her previous work as the DOJ’s assistant US attorney and digital currency coordinator, Haun clarified that the the department’s crypto task force not only cracks down on crypto-related crimes, but it also aims to understand the potential benefits of cryptocurrencies.

According to Haun, digital currencies could “transform” the existing financial system as they may allow the currently over 2 billion people throughout the world, who do not have access to modern banking services, to participate in the global economy.

"Adding Value" To The Crypto Ecosystem

The former counselor to the US Attorney General also thinks blockchain technology may allow many people to access better identity verification solutions. Explaining her role in the crypto ecosystem, Haun said:

There was a real need for ‘bridge building’ between the way regulators were thinking about this technology and the way some entrepreneurs were thinking about it, Those views were very different.

Kathryn Haun

She added that her aim is to “add value” by helping to “bridge that gap” and to help out “strategically...with the roadmap” the new financial technology is planning. Haun emphasized that:

We don’t want regulation to outpace understanding … if you would have had a law about cryptocurrencies or blockchain past a year ago, it would have been completely outdated today.

Kathryn Haun

After having worked on the board of directors at crypto exchange Coinbase, while also doing some personal investing in digital assets and advising blockchain startups, Haun decided to join Andreessen Horowitz because they “take a very long term view of cryptocurrency.”

Clarifying that a16z is not a crypto hedge fund, Haun noted that the company is an aggressive venture capital firm that has “a 7 to 10 year view [as] we are really in the ‘dial-up days’ of crypto.”

Scaling, Custody, Security

Important products the crypto industry currently needs are better security and custodial solutions, Haun noted. As most crypto industry participants have said, Haun thinks there’s a strong requirement for effective scaling solutions.

Addressing the fact the users are frustrated with cryptos “being too slow and not moving fast enough”, she remarked that: 

this is true of a lot things that displaced the older models. Going back to the ‘horse and buggy days’, when the first car came out. People thought, ‘well it’s slower and why not just use the horse and buggy.

Kathryn Haun

She added:

Roads needed to be built first. Highways needed to be built first. Services for users like gas stations need to come along first. Same is true in crypto.

Kathryn Haun

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.