Dragonfly discusses investment principles: stick with the market, believe in exponential growth.

Source: "When Shift Happens"; Compiled by: Felix, PANews

Dragonfly managing partner Haseeb Qureshi recently appeared on "When Shift Happens," where he revealed a key rule that separates truly wealthy investors from average ones: stay in the market when everyone is telling you to get out.

Haseeb, who transitioned from a professional poker player to a venture capitalist, shared how he survived the 2018 crash and the collapse of FTX, and why he defended Ethereum and Solana when everyone else gave up on them.

Host: How have you been feeling lately? How's life?

Haseeb: Tired, very tired. Not just because of the market—there's a lot going on internally, a lot of hard work that most people don't see. Most people think VC is a cushy job, like taking summer off, investing, and then waiting ten years. But I think that's being a bad VC. We stand out because we work harder than others. I'm very responsive, always available to take calls. That's how Dragonfly works. Not everyone can sustain this for years.

Host: There's a lot of talk about "people leaving" now, like Kyle Samani leaving Multicoin, many OG's leaving crypto. What do you think?

Haseeb: I think it's overstated. Every time prices drop, people leave. It's a classic recency bias—because it's happening now, people think it's worse than the FTX collapse, which is nonsense. After FTX collapsed, so many people were forced out because they lost everything. Those who were into metaverse, Web3 gaming—when those concepts didn't take off again, they all left too. People just forget about them.

On the other hand, people have normal career tenures. It's normal for someone to move on after a decade in this space. Especially someone like Kyle—God knows how much money he's made. He's been an incredibly successful VC, built a massive multi-billion-dollar platform. It's not surprising he's leaving. It happens in every industry.

Also, there's a big difference between pioneers and settlers. They're always different. It's like a law of human nature. The ones who carved a path west to find California, to settle the new lands, are not the same people who eventually built the towns. The psychology and mindset are very different. The first 10 employees of a startup are completely different from the 50th, 100th, especially the 1000th employee. The people who helped build Google in the early days are entirely different types of builders from those who later built Google Shopping or Google Drive. This is happening in crypto now, and it's normal.

Host: How did you manage to stick it out?

Haseeb: You have to have more to prove. I think for someone like Kyle, he's obviously very successful. He doesn't need more money. Maybe he does—I don't know his lifestyle. But I think at a certain point, it's not about money anymore. It's about proving something. If you're Kyle, I'd guess you feel you've already proven yourself. You feel like everyone doubted you. We talked about FTX—Multicoin was one of FTX's biggest investors. That was their near-death experience. After FTX collapsed, one of their biggest, most successful investments went to zero, exposed as the scam of the century. And Solana, their heavy position, went from over $200 to $8. They survived all that, believed they were right when everyone else was wrong, and eventually were vindicated. That's absolutely an incredible career peak. I don't know what that feels like, but it must feel amazing. Leaving after that—I'd say, yeah, I understand why you'd leave. If you have a few championship rings, nobody envies you for deciding not to play this game anymore.

Host: You mentioned recency bias. What other biases try to deceive investors' minds but are actually unhelpful?

Haseeb: That's a good question. I think the most insidious one for investors is status quo bias. That is, preferring or expecting that the status quo will continue because, if it weren't resilient, why would it be the status quo? Today I think it's hard to find people who are very status-quo-oriented because the whole tech mood is "everything is changing." The AI revolution really makes people feel: "Oh my god, anything can change." A few years ago, there was a sense that maybe nothing would change, and people were talking about the "Great Stagnation." Peter Thiel had a famous essay about how we have a lot of innovation in bits (information) but not in atoms (physical world). I think we've broken out of that lethargy to some extent. Now we have longevity research, CRISPR gene editing, AI, drones, quantum computing, nuclear reactors. It really feels like there's movement again in science and technology, which is very healthy for society. But even so, the most common failure mode among investors is still not believing that things can really change.

Host: You spend a lot of time in Silicon Valley. What did you learn there that you couldn't learn anywhere else?

Haseeb: It's hard to describe. It's not propositional knowledge—a set of facts you can't learn elsewhere. It's a way of operating, a way of thinking unique to Silicon Valley. Many cities around the world say, "We want to be the next Silicon Valley." But almost every time I hear that, it's a joke. For example, in Germany, people ask how Berlin can become the next Silicon Valley. I'd say, brother, don't joke. The uniqueness of Silicon Valley—I think only two places in the world have replicated it: China and Israel. Very few places know how to build that model.

First is celebrating failure. In Silicon Valley, failure is normal and not pathologized in any way. In Silicon Valley, you can "fail upward." In most places, that's unheard of.

Host: In most places, they tell you: "Failure is good." But actually, people think you're a loser and won't give you a job. The reality is, if you start a company, especially if it fails, it's a permanent stain. They'll ask why you left a good job at Deutsche Bank or SK Telecom to start a company.

Haseeb: Exactly. That mindset obviously can't create a vibrant startup ecosystem. The second point about Silicon Valley, many don't understand, is that it's an extremely high-trust society. Even though it's in the US, which is a typical litigious society, there isn't much litigation in Silicon Valley—not many people suing each other or getting into fierce disputes. The reason is that we understand this is a cauldron of ideas. People will step on each other's toes, people will steal each other's ideas, but that's okay. Because we're all building in the same direction, not sweating the small stuff, for the greater good. In many other places, people become extremely short-sighted—if you want to see my startup, you have to sign an NDA; if you do this or that, I'll sue you. If you want to build the future, you have to move fast, and it must be trust-driven.

The last thing Silicon Valley got right that others got wrong is its extremely close mobility. California does not enforce non-competes. In New York, Boston, or any other country, non-competes are the norm. If you leave a company, you can't work elsewhere for one to three years. That effectively sidelines talent, making people extremely reluctant to leave their current company. Silicon Valley understands from a global perspective that even if, from an individual standpoint, my company might be harmed by someone taking knowledge elsewhere, for society as a whole, efficient information transfer is better. Look at all the AI labs—almost all in Silicon Valley, except China's. We once thought one company would crack AGI and have an insurmountable advantage. But three years later, all labs are basically at the same frontier level, and models are free. Why aren't they expensive? The answer is competition. Why is there competition? Because all labs leak information like sieves. Engineers all over Silicon Valley gather in cafes, on walks, at family parties, telling each other what they're working on and trade secrets. Knowledge spreads very fast, and everyone catches up quickly. That doesn't happen anywhere else in the world.

Host: You often compare crypto to tech. Because you have a Silicon Valley mindset, you're someone who's bullish on the future, takes a long-term, big-picture view. We try to filter signal from noise in this podcast, but when crypto does well, there's too much noise; when it does poorly, people get angry and lose direction. Why do you compare crypto and tech so frequently?

Haseeb: Crypto is tech. It's software that people run on computers (e.g., Bitcoin). Of course, it doesn't necessarily perform like Microsoft. But in building effective teams, how technology is adopted, the growth curve of sustainability, we can learn a lot from the tech industry. At the same time, crypto is not just tech; it's also about money, society, and governance. If you don't understand its financial elements (like learning capital flows from the internet bubble), you won't see the full "elephant."

Host: For me, it's frustrating because, since it's about money, there are a lot of traders. They don't understand, or they're in it for the wrong reasons. I can't understand how they can be angry all day about these small things.

Haseeb: David Hoffman has a great quote: "Crypto is not about making you rich. Crypto is about making you free." That's a profound insight. At the same time, I don't want to pathologize people who enter crypto to make money. I want to make money too, there's nothing wrong with that. Crypto's philosophy is about freedom, and freedom includes the freedom to make money. No market requires people not to be greedy. When crypto has problems, people say it's because someone got greedy (Three Arrows Capital, etc.). My response is, that's too superficial. Are people in tech selfless? No. If everyone is greedy but you're creating value in a sustainable way, that's fine. Not everyone can make money, but everyone can be greedy.

However, there still needs to be some attraction bigger than making money. If everyone only cared about making money, the industry would be destroyed. Some people must genuinely focus on the long-term value we're creating. Greed and extraction are two different things. Goldman Sachs has a famous phrase: "Long-term greedy." Short-term greed looks like greed but is actually stupidity, like King Midas turning everything to gold but starving because he couldn't eat. Long-term greed means you make decisions in the short term that might not make you money immediately, but in the long run, you'll make more. Because that's reputation, that's a career. If you just want to make the most money as fast as possible, go sell drugs. That's definitely not a long-term greedy strategy.

Host: You're a long-term greedy person, you're an investor. Let's talk about long-term greed. What do you mean when you say you have to believe in exponential growth? How does it relate to making big money?

Haseeb: I entered the industry full-time at the end of 2017, the peak of the ICO bubble. I started as a VC in early 2018, right when the bubble burst. 2018 was the worst sentiment I've seen in crypto, possibly worse than FTX. Because at least with FTX, there was someone to blame (Sam lied, fraud). In 2018, there was no one to blame—it just felt like we had all been collectively foolish, everything we built had no value. Bitcoin went from $19k to $4,000, Ethereum dropped below $100. The right decision then was: stay in the market, hold those assets, and bet on what you believed in for the long term. From 2018 until before the pandemic, nothing happened—no price action, just a faint light in the darkness (like DeFi's Maker DAO and Compound starting to form). In crypto, you have to believe in exponential growth, believe that this technology will affect far more than just those 100k people.

Host: After the FTX collapse in 2022, Bitcoin fell below $20k. What made you step in and buy assets after that total washout?

Haseeb: The answer is still believing in exponential growth. At that time, it was unimaginable to tell someone the US government would buy Bitcoin. We were still wondering if the US would ban crypto because of this disaster. You have to believe; if you don't, you'll make the wrong decision at every moment. I used to be a professional poker player. In poker, you learn you can't win every hand—you have to think strategically. You can't always buy low and sell high because you can't time it perfectly. The only thing you can choose is your strategy, and my strategy is to believe in exponential growth, to understand that crypto will be much larger in 10 years than it is today.

Host: It's obvious in hindsight, but it wasn't then. Now we have a feeling that most people are thinking, "What juice is left to squeeze?" (How much room for growth?) Now with Trump, the US government, and institutions involved, people might feel they missed out. How do you see a future even bigger than today?

Haseeb: Look at how many institutions actually own these things. As a large VC fund, we manage many assets and institutional LPs. Most institutions have zero crypto exposure. Those that invest in us might have less than 1% crypto in their portfolio. Morgan Stanley recently announced they're starting to allow their wealth management division to recommend digital assets to high-net-worth clients (suggesting a few percentage points). Before that, every wealth manager's advice was: this is not investable, stay away. Institutions are just beginning to embrace crypto. Vanguard (the largest ETF provider in the US) said not long ago they weren't ready to approve a Bitcoin ETF.

Another thing to understand is that crypto adoption is largely generational. The FIT21 bill passed the House; the biggest predictor of who voted for it was age. Older people don't know what's happening, think crypto is scary, while their kids are using it. As baby boomers age and hand over power to the next generation, everything will change. Young people entering college don't remember a time before Bitcoin (it's 18 years old). Ethereum was created when they were 10. Changing society's perception takes time.

Host: That's like the shift to the cloud. In 2015-2016, companies were scared of cloud services, thought data not in their own building was unsafe. But as a new generation of executives took over, which company doesn't use cloud services now? It's too convenient, it's a no-brainer. That only took a few years. And now we're talking about money.

Haseeb: Yes, it's most obvious for Bitcoin. People have a deep attachment to gold, saying it has a long history and can't be replaced. I think they exaggerate that. For young people, their perception of value is already digital. Why is a stone laboriously dug from the ground more valuable than a digital asset? SpaceX plans to mine asteroids; if they find an asteroid with gold, the Earth's gold supply could double, permanently changing gold's dynamics. All the gold in the world can fit into a cube smaller than a football field. Bitcoin is software; you can't find Bitcoin on an asteroid. For a software civilization, our money should also be software-based—it makes sense.

Host: Do you sell the major tokens you personally believe in?

Haseeb: My personal finances are very simple; I mostly hold. I am heavily invested in all our funds. Personally, I have some crypto and some ETFs—basically buy and hold. I only liquidate assets for paying taxes or making donations.

Host: In the context of exponential growth, can you talk about your logic for Bitcoin?

Haseeb: As a VC, I don't invest in Bitcoin beyond my personal holdings because it's not a VC asset. Bitcoin's logic is entirely about Schelling points, about social consensus—that society needs to build a consensus that Bitcoin will be the way to denominate non-sovereign wealth in the future. People complain that Bitcoin doesn't behave like gold, or about correlation issues—that's stupid. Bitcoin and crypto are multifaceted, with different mechanisms. People actually don't want it to be like gold or completely uncorrelated; they just want it to go up. As long as it goes up, everything is forgivable.

Host: What does Bitcoin look like at saturation?

Haseeb: Saturation means Bitcoin becomes very boring. Young people no longer talk about it; it's something only elderly institutions do. When you feel embarrassed talking about it with your kids, it's truly mainstream. At that point, you might see Bitcoin behave like gold in the past.

Host: Since you're in the VC circle, some large crypto assets seem more aligned with VC thinking. You've been actively defending ETH and SOL when many people lost confidence. Why?

Haseeb: I usually like to defend views that "no one defends." On X, the zeitgeist at the time was that these assets were just memes, had no cash flow, and shouldn't have a valuation. I think that was a mistake. The market gave them tens of billions in valuation, reflecting a deeper wisdom: the market believes they are valuable and will become much bigger than today.

Host: Like Tesla? Because Tesla has a ridiculously high P/E ratio, but it's a growth story.

Haseeb: Yes. The market has two modes: cash flow mode and growth mode. Cash flow mode is "don't tell me a story, show me the money." Growth mode cares less about cash flow and more about growth. Which mode is Ethereum in? The market clearly treats it as growth mode. Ethereum's price moves not because of fee increases or burn increases; it reacts to growth expectations, to narratives about the future.

Host: How often does the market misjudge these growth stories over long periods?

Haseeb: Often, like WeWork, Peloton, and the metaverse. During the pandemic, people thought we'd work from home forever, but things normalized. However, crypto is very special. It has boomed, burst, then boomed again, burst again, and boomed again. That's extremely rare. It tells you that something deeper and more resilient is happening in the crypto market, and the speculation around it is inherent to the product.

Host: Which category does Hyperliquid fall into?

Haseeb: It has both, which is very rare. It has massive cash flow (buyback and burn tokens) and a very compelling growth story (expanding into commodities and index derivatives).

Host: When AI is sucking away talent and capital, why should people stay in crypto?

Haseeb: This answer might surprise you: I don't know if they should stay. First, it's absolutely correct that AI is consuming a lot of talent. AI is without a doubt the most important technology of the 21st century. If you can't find the value you create in crypto, maybe it's time to leave. The reallocation of capital and talent is exactly what capitalism does.

The OGs we talk about leaving are industry pioneers. Pioneers are crazy people attracted to the "Wild West." Now crypto is no longer the Wild West. We have technology and forms; next we need to build civilization on this foundation, doing a lot of infrastructure. Social media had all the important apps built by 2010 (except TikTok). By then, the ideas were there; after 2010, it was all execution and building, achieving 10 to 30 times financial growth, creating the world's most powerful companies.

We're now in the infrastructure phase of crypto (execution phase). If you need the craziness of the Wild West, it's not here anymore (maybe in AI). You can lament that, but it has its own rewards and excitement. If you don't want that, you should leave. But that doesn't mean crypto is over. There are still crazy potential gains, like social media after 2010.