Original article: When Shift Happens
Compiled by: Yuliya, PANews
In the field of cryptocurrency investment, finding the next 100-fold return opportunity is the dream of every investor. As the world's top cryptocurrency investment fund, Dragonfly is known for its unique investment vision and deep technical understanding. Its investment portfolio includes many star projects such as Avalanche, Near Protocol, Monad, Athena, etc.
In the podcast When Shift Happens, Haseeb Qureshi, managing partner of Dragonfly, shares his legendary experience from professional poker player to top cryptocurrency investor, and how to build lasting influence in this fast-growing industry. This episode covers the most critical topics in cryptocurrency investment: how to turn cryptocurrency into a team sport, why money can't buy happiness, how to deal with imposter syndrome, and common mistakes made by new investors. PANews compiled the text of this podcast.
Personal Background
Haseeb:
I am Haseeb Qureshi, and I am currently the managing partner of Dragonfly Fund, a global cryptocurrency investment firm with billions of dollars in assets under management. My career has been quite dramatic: starting as a professional poker player, transitioning to a software engineer, then becoming an entrepreneur, and finally entering the VC industry for more than six years. Of all my career experiences, cryptocurrency investment is the most challenging field, but it is also the choice that makes me feel the most valuable and meaningful.
Host: What made you finally decide to give up your poker career?
Haseeb:
It was a very confusing time. I had built up a reputation in the poker world, but it took a serious hit due to an incident involving one of my students cheating. At the same time, I was becoming increasingly bored with poker. I didn't want to look back on my life when I was 50 and realize that I had spent my entire life playing poker to win other people's money . That wasn't what I wanted my life to be about.
I made a radical decision: I only kept $10,000 for my basic living expenses, and either donated the rest or gave it to my parents for retirement. I wanted to force myself to start over. I was 23 years old at the time, and I went back to school to study non-technical majors such as English and philosophy. As the oldest student in the class, with nothing on my resume except "professional gambler", I was really panicking.
This decision gave me a new perspective. When I was a software engineer in Silicon Valley, I was making about $100,000 a year, much less than when I was playing poker. But interestingly, my happiness didn't change much. Because what really brings satisfaction is learning new knowledge, achieving personal growth, and making authentic connections with people around me.
Similarities and Differences between Poker and VC
Host: It's a big transition from a professional poker player to a venture capitalist. How do you view the similarities and differences between these two fields?
Haseeb:
The most fundamental difference between venture capital and poker is the length of the feedback cycle.
- In poker, the correctness of a decision can be verified in a very short time. For example, when you judge that your opponent is bluffing and choose to call, the result will be revealed immediately.
- In the field of venture capital, the situation is completely different. It often takes six to seven years to truly understand the quality of an investment decision. As we often see, a startup company may seem to be going smoothly from the seed round to the A round, but may suddenly encounter a fatal crisis in the C round. This delayed feedback mechanism places extremely high demands on the judgment of investors. It is worth mentioning that it is precisely by relying on rigorous judgment that we have successfully avoided projects such as FTX, BlockFi, and Luna that eventually collapsed.
Host: It sounds like the feeling would be very different when you make the right judgment?
Haseeb:
Indeed, the difference is stark. In poker or trading, the reward for making the right decision is immediate and intense, producing an immediate dopamine rush. That "I won" feeling of accomplishment is immediate.
But in venture capital, success is a gradual process. It's more like nurturing a tree: there's no dramatic climax, but it requires constant patience and commitment. You'll see startups grow step by step: each round of financing brings a steady increase in valuation, continued improvement in operating indicators, and jointly finding solutions when challenges arise.
This process requires investors to have great patience and persistence. Unlike the quick decision of winning or losing in poker, venture capital is more like a marathon, testing the spirit of long-termism and the ability to continuously create value . It is this gradual growth process that makes venture capital work particularly meaningful.
Investment judgment
In the field of venture capital, people are often more critical than business model analysis . Although investment giants like Naval Ravikant or Chamath Palihapitiya often emphasize the need to break stereotypes , the actual judgment process is much more complicated. As an experienced investor, I find that there is an important paradox in this.
Junior investors usually need to go through a cognitive process: understanding business models and technological innovations does require continuous learning and in-depth research, which often requires building a systematic analytical framework by studying the history of technology and business. But interestingly, understanding human nature is our innate ability.
Our nervous systems are wired to read other people, and even if you can’t pinpoint a specific reason why you mistrust someone, it’s often a combination of subtle signals you’re receiving.
However, novice investors often ignore this intuitive judgment and rely too much on superficial evidence:
- "Maybe I don't have enough experience and my judgment is not accurate enough"
- "The founder has an impressive resume and a solid business plan"
- "He has the endorsement of so many well-known partners"
As you gain experience, you will gradually realize that you need to learn to trust your intuition . The key is to see beyond the superficial social proof, to perceive the essential characteristics of a person, and to think about the choices he might make when faced with pressure, uncertainty, and moral dilemmas. Usually, your first instinct is often correct.
Stereotype
Venture capital is essentially a people business. Although the field of social psychology faces a "reproducibility crisis," "stereotype accuracy" is one of the most robust research findings. For example, when you think that highly aggressive people tend to lack reliability, this judgment is usually accurate.
The human brain is a system that is constantly performing statistical learning. Although contemporary culture tends to deny stereotypes, in fact stereotypes can be positive, negative, or neutral. For example, the stereotype that "Asians prefer rice" is neutral and statistically accurate.
Investment motivation
Host: What drives you to continue to engage in these undeveloped fields?
Haseeb:
Essentially, the fields I am involved in, whether it is early poker or current cryptocurrency, have two significant characteristics: high chaos and creativity. This is fundamentally different from traditional linear development fields. For example, doing quantitative analysis on Wall Street is essentially an intelligence competition. Whoever has a higher "score" can get more rewards.
In an emerging field like cryptocurrency, it is more like exploring an unknown continent. It requires not only extraordinary wisdom, but also the courage to take risks, the ability to continuously innovate, and the insight to integrate multi-dimensional information. It is this challenging environment that keeps me passionate.
There is no so-called "aristocracy" in the crypto industry . Unlike traditional VCs, you don't need a prominent background or a large network of contacts, or even experience in starting a billion-dollar company. Sincere dedication and continuous hard work are the key to success.
The bear market is like a magic mirror, which can clearly show who comes with a sincere purpose and who is silently persisting . Each round of bull market will attract a group of successful Web2 entrepreneurs with a lot of money, but those who can stay in the end are often those who are considered "alternative" or "crazy". They are the group that truly builds valuable projects.
Some thoughts
Structured Learning
Host: Can you talk about your understanding of learning methods?
Haseeb:
I think learning can be divided into two types. The first is structured learning, and the other is unstructured learning.
The characteristics of structured learning are clear learning paths and tool support. Take the subject of chemistry as an example. It has a complete teaching material system and supporting learning resources. Learners only need to follow the established path step by step. The key to this learning model is the cultivation of self-discipline and concentration. In fact, most of the training we receive in the traditional education system is this kind of training. However, the real world often does not care about your structured learning results. When you finish college and go directly to find a job, you will soon find that no matter what you learned in school, you can hardly use it. The education system is more like a qualification certification process, proving that you have the basic qualities to receive professional training.
In real professional environments, especially for those positions that can create high added value, there are often no ready-made guidebooks or training materials. You cannot systematically prepare for the exam like you do for an academic exam. This requires practitioners to constantly explore and learn in unknown areas. Even if there are experts in this field, they often do not have enough time to systematically impart knowledge.
Moderator: Can you give an example of the application of unstructured learning in practice?
Haseeb:
- I was exposed to this style of learning very early. When I started playing poker in 2006, there were very few educational resources in the field. There were some books, but they were not good enough. If you wanted to be a world-class poker player, you could only glean bits and pieces of information from blogs, forums, and videos. You had to teach yourself, through experimentation and risk taking, investing your own money, learning from failure, and iterating.
- The same thing happened in the cryptocurrency space six or seven years ago. At the time, there was only Mastering Bitcoin and a Princeton textbook (written by the co-founder of Arbitrum), and Ethereum only had a few words in that book. To learn these things, you can only do it in-depth, communicate with people at the forefront, create your own curriculum system, and iterate continuously.
This unstructured learning is often the most valuable and the most rewarded by the market . People who can master this learning style usually get the highest rewards, which is exactly what school education does not teach us.
Money can't buy happiness
Host: You once said that "money can't buy happiness", can you elaborate on that?
Haseeb:
I started playing poker professionally at the age of 17, and I met a lot of young, wealthy people at that time, but they were all miserable. In the poker world, you see people in their 20s who are worth millions. They buy luxury cars and watches, but no one cares. If you buy these things just to gain status symbols instead of enjoying them, there is no point. Money can indeed solve your financial problems, but studies show that after a certain level of income (such as $50,000-100,000 per year), the increase in happiness drops sharply.
People's happiness comes more from personal progress, growth, and connection with others - friends, family, and relationships. It may sound like a cliché, but it's true.
Effective Altruism
Moderator: What do you think of the Effective Altruism (EA) movement?
Haseeb:
I started to get involved with EA after I quit poker, in 2012-2013, when the movement was just starting. During the FTX period, EA became "cool", which made me a little uncomfortable because EA was essentially a very alternative concept. Now with the collapse of FTX, the situation is completely reversed.
It's a bear market for EAs right now, which is healthy to some extent. When EAs were "cool," people questioned the motives of those who joined. But now people who say they are EAs are questioned, which tests people's true belief in these concepts. Just like cryptocurrencies, the failure of FTX does not affect my belief in cryptocurrencies, because FTX represents centralization and third-party trust, which is completely opposite to the core value of cryptocurrencies.
Moderator: How to deal with public misunderstandings in these areas?
Haseeb:
This involves the difference between philosophy and politics. Most ordinary people may not understand the details deeply and are prone to misunderstandings. This does make working in the EA or cryptocurrency field more difficult, but it is important to stick to the core ideas and values.
Views on Cryptocurrency
Host: What unique insights do you have into the nature of cryptocurrency?
Haseeb:
At its core, cryptocurrency is a philosophy. It raises a fundamental question: Should the flow of value and money be at the disposal of individuals or controlled by the state? This question goes far deeper than the actions of a Bahamian businessman.
I’m not joining this space out of libertarian conviction. In fact, I’m not even sure that cryptocurrency is ultimately good for the world. It could bring more chaos: weakening state control over monetary policy, increasing the risk of hacker attacks, and especially in the age of AI, the uncensorable, unstoppable flow of money could have dire consequences.
But the point is that the development of cryptocurrency is inevitable . Just like social media, whether people think it is good or bad, it has become a part of reality.
Host: You mentioned that cryptocurrency is very different from other technologies?
Haseeb:
Yes, this is the most unique thing about cryptocurrency. Most technological innovations in the past 50 years have been about strengthening state power. Think about the Internet, artificial intelligence, they all enhance the government's control capabilities to some extent.
But cryptocurrency is inherently disruptive. Just as YouTube disrupted the monopoly of traditional television stations, cryptocurrency is creating "user-generated money." If money was inherently free and programmable, we wouldn't need cryptocurrency at all. Its very existence is a response to government restrictions.
Most people believe that technology should eventually be "tamed" by the government. But the uniqueness of cryptocurrency is that its core value lies in not being tamed. This makes many people uncomfortable, which is why some people try to separate blockchain technology from cryptocurrency.
If we look at what Snowden revealed, the internet has actually enhanced the government’s surveillance capabilities . In contrast, cryptocurrency may be the only major technological innovation in the last 50 years that actually serves the individual rather than the state.
Keys to Success
Host: Can you share the key principles for success in the cryptocurrency space?
Haseeb:
1. The first principle is to improve your technical understanding. Although everyone has different technical skills, cryptocurrency is essentially a technological innovation. If you don't understand the technology, you can't build a robust mental model to predict the direction of the industry. You don't need to be a top smart contract developer, but at least understand the basic principles of program and computer operation. This is how you can judge what is feasible and what is a false promise. In this field, improving technical understanding is always the right choice.
2. The second important principle is to start writing and sharing publicly. Many people feel that they have no new ideas and want to wait until they have accumulated enough knowledge before starting to share. This is a huge mistake. I started blogging when I first got into cryptocurrency. Looking back at those early articles, they were indeed naive, but it didn’t matter. Because:
- No matter what stage of learning you are in, there is always someone who needs the basics more than you do
- It’s a good thing that no one pays attention to you in the early stage, as it gives you room to practice.
- If you improve 1% every day, the accumulation after one year will be amazing
Newcomer advice
Host: What is the most counterintuitive fact for new investors?
Haseeb:
The most important thing to realize is that almost all important crypto projects were created by crypto natives, not elites from Google or Harvard. Whether it is Ethereum, Uniswap or other important projects, they were created by "weirdos" who are deeply involved in cryptocurrencies. These people may seem "too obsessed with the network", but they are precisely the ones who build the most important projects.
Host: So, how do you become a crypto native?
Haseeb:
The key is to find your unique strengths. Don’t try to completely reinvent yourself as another Vitalik, or learn complex zero-knowledge proofs. Instead, you should:
- Identify your areas of expertise
- Maximize this advantage
- Find the crypto projects or people who need this skill the most
- Prove your value with practical actions
It's like starting a business, don't imitate other people's paths, but find a unique position based on your own strengths. Don't think about "how to get the job of that cool-looking guy", but think about "what value can I bring to this industry".
Host: Does this sound a lot like entrepreneurial thinking?
Haseeb:
Yes, this is exactly the same as starting a business. When starting a business, you will ask yourself: What am I good at? What problem can this skill solve? You will choose the field you love and are good at, instead of blindly making the next Uber. Similarly, in career development, don't try to copy other people's career paths, but plan your own path based on your own strengths and weaknesses.
Number of fans ≠ influence
Host: When I first started running Twitter, I thought the number of followers equaled influence. But later I discovered that many high-follower accounts are actually just "content farms". Although they have a lot of interactions, their actual influence is very small. Interestingly, the real industry leaders often do not have many followers. This is actually a phenomenon called "Buton's paradox": in extreme cases, the two originally related factors (number of followers and influence) will diverge. Can you explain it in detail?
Haseeb:
This is a phenomenon that many people can intuitively feel. Accounts with millions of followers may indeed be good at creating content and entertainment, but when they really want to push something to happen, they often fail to do so. For example, an account with 5 million followers wants to push the price of a certain coin up, but no one responds.
On the contrary, some accounts with a small number of followers can attract the attention of the entire industry once they speak out. For example, Bow, a partner of Dragonfly, is very low-key on Twitter and does not even have a social media account, but he is a very influential figure in the industry.
The development curve of influence
This phenomenon tells us two things:
1. Don’t use social media followers to judge influence
- Many people idolize high-follower accounts and think they must be very influential
- But in reality, the actual influence of many high-follower accounts is limited.
- This often causes the owners of these accounts to experience a "clear awareness"
2. The relationship between fan growth and influence is nonlinear
- When the number of followers increased from 200 to 2,000, I could really feel the obvious change.
- But when it increases from 50,000 to 100,000, the actual influence may not change much.
- This shows that after reaching a certain critical point, the return on continued investment in increasing followers is very low.
Host: So, how do you really build influence?
Haseeb:
Many people think that building influence in the cryptocurrency community is through self-promotion, showing off connections, or quickly cashing out pre-sale projects. But in fact, the real method is:
- Creating value for the industry
- Helping founders solve problems
- Doing meaningful things behind the scenes
- Give value in every interaction
This is indeed much harder than simply posting, which is why most people fail to truly build influence - because most people are takers rather than givers.
VC’s experience and reflections
The cryptocurrency industry attracts all kinds of participants, from day traders seeking short-term gains, to professional hedge fund practitioners, to entrepreneurs of innovative projects and venture capitalists who support innovation. The industry often exhibits the characteristics of a zero-sum game, like a "player versus player" (PVP) game. Long-term participants may face challenges in mentality, prone to cynicism, fall into nihilistic thinking, wander in the periodic false prosperity, and bear the psychological pressure of rapid cashing out.
However, venture capital plays a unique role in this industry, which is essentially a zero-sum game. VCs promote team success by discovering outstanding talents and providing necessary support. The success of VCs is completely dependent on the success of the entrepreneurial team. This close interest relationship transforms the original "single-player game" into a "multiplayer game". This not only creates greater value, but also provides practitioners with a healthier mentality and development model. This teamwork approach may be the best way to participate in this disruptive and important industry.
Imposter Sense and Self-Perception
Host: Have you experienced imposter syndrome during your transition?
Haseeb:
Yes, this feeling is always there. I think if a person does not have this feeling at all, it is either not thinking deeply enough or lacking self-reflection. The key is not to overcome this feeling, but to learn to live with it. When I first became an investor, this feeling was particularly strong - "I have never created a successful company, why should I give advice to others?" But the interesting thing is that it is precisely this "outsider" perspective that allows me to see problems that founders may not see.
When you make suggestions as an investor, they are often taken seriously. For example, a company may have obvious problems, such as poor marketing strategy or product positioning, which are obvious to people inside the company, but the founder may not see them. When an investor, even a junior investor, makes the same suggestions, the founder often takes them seriously.
This "magic" partly comes from the external perspective of investors, which is not affected by the "gravitational field" within the company. For example, Polygon was operating six different product lines at the same time for a period of time. I told the founder: "There are too many product lines, and the market will feel confused. You need to simplify the product lines and make the story clearer." This suggestion was positively responded to, although I may not be the only one who made this suggestion.
Success vs. Failure
Host: In venture capital, what was the biggest "moment of success"?
Haseeb:
To be honest, there is no such thing as a "big explosion moment". VC is a day-to-day, continuous accumulation process. Even when you receive a check when a project exits, the feeling is more like "finally it's here" rather than "wow, incredible". This characteristic makes VC healthier than other investment methods.
Host: What does it feel like to make a mistake? Can you share a specific example?
Haseeb:
In the VC industry, the biggest mistake is often not making the wrong investment, but missing out on a good project. Because VC follows a power law distribution, missed opportunities are more fatal than failed investments.
For example, what I regret most is missing out on Uniswap’s Series A funding. At the time, we analyzed all the data:
- Profitability of liquidity pools
- Trading Volume
- Pros and cons of pricing mechanism
Our analysis was all “smart” and “correct”, but we completely missed the most important point: the revolutionary innovation brought by Uniswap - a fully automated system that allows anyone to list and trade any asset.
The eternal dilemma of investing
Haseeb: As an investor, you are never completely satisfied because:
- Or regret missing out on a good project
- Or regret not investing more
- Worry about selling too early or too late
But this discomfort is normal and even a good thing. If you get too comfortable, it can be a red flag.
As a VC, I have a relatively good grasp of the timing of market exit. The key is to understand:
- Don’t chase the perfect exit timing
- Set reasonable goals: For example, exiting within 40% of the highest point is a success
- Excessive pursuit of precision is dangerous and may cause you to miss the entire cycle
- It is impossible to accurately pick the bottom or the top
Maintaining a public image
Host: As a public figure, how do you deal with drastic changes in external evaluations?
Haseeb:
It's really challenging. Take 2021-2022 as an example. The whole image of the cryptocurrency industry has changed dramatically. Especially after the collapse of FTX, the entire industry was affected. Because of my association with effective altruism, I was also affected a lot after the collapse of FTX. Suddenly, you are no longer invited to parties and people don't want to associate with you too much.
As a VC, it does matter what people think of you because that’s your business. But I’ve found the best way to deal with this is to:
- Be transparent
- Speak your true thoughts
- Continuously create value
In this industry, you are bound to offend some people. I have offended: Solana community, Cardano community, and other major project communities. But this industry has a characteristic: memories are short. For example, I once wrote a critical article about EVM (Ethereum Virtual Machine), and the Ethereum community was very angry with me. Now, many people think I am an Ethereum maximalist.
When faced with controversy, ask yourself, "Is this a fight I really care about?" If not, delete the controversial content and move on. In this fast-moving industry, you don't have to take every controversy seriously.
Future Outlook
Host: Looking ahead to the next 12 months, what are you most concerned about?
Haseeb:
From a macro perspective, the direction of the market will largely depend on the policy trends of the Federal Reserve. The institutionalization of cryptocurrencies is an irreversible trend, but this process will be relatively gradual and is unlikely to experience drastic fluctuations.
What is noteworthy is the change in institutional attitudes. Take BlackRock, for example, from 2019 when we were still trying to seek its approval to now being an active advocate of a Bitcoin ETF, which is quite significant. Over the past five years, the cryptocurrency industry has made far more progress in institutional acceptance than many market participants realize.
Based on the current market environment, I expect the growth trend to be more rational in the next two to three years. However, it should be pointed out that the cryptocurrency market has its own uniqueness. Once it enters a new market cycle, the market trend may exceed conventional expectations. This shift may be due to adjustments in risk preferences or changes in the interest rate environment. In general, I am cautiously optimistic about the cryptocurrency market, but I expect the volatility to be smaller than the 2021 cycle.
