Conversation with Dragonfly Managing Partner: How to succeed in the cryptocurrency field without relying on luck?

Original text:When Shift Happens

Organized by: Yuliya, PANews

In the field of cryptocurrency investment, finding the next 100-fold profit opportunity is every investor’s dream. As the world's top cryptocurrency investment fund, Dragonfly is known for its unique investment vision and deep technical understanding. Its investment portfolio includes Avalanche, Near Protocol, Monad, Athena and many other star projects.

In this episode of the When Shift Happens podcast, Dragonfly Managing Partner Haseeb Qureshi shares his journey from professional poker player to top cryptocurrency investor and what it takes to build a lasting impact in this rapidly evolving industry. This episode covers the most critical topics in cryptocurrency investing: how to turn cryptocurrency into a team sport, why money can’t buy happiness, how to deal with imposter syndrome, common mistakes new investors make, and more. PANews has compiled the text of this podcast.

personal background

Haseeb:

My name is Haseeb Qureshi and I currently serve as the Managing Partner of Dragonfly Funds, a global cryptocurrency investment firm with billions of dollars of assets under management. Speaking of my career, it can be said to be quite dramatic: I started as a professional poker player, transformed into a software engineer, and later became an entrepreneur, and finally entered the VC industry for more than six years. Of all my professional experiences, cryptocurrency investment, although the most challenging area, is also the choice that feels most valuable and meaningful to me.

Host: What made you finally decide to give up your poker career?

Haseeb:

It was a very confusing time. I had built up quite a reputation in the poker community, but my reputation took a serious hit due to an incident involving one of my students' cheating. At the same time, I was growing tired of poker. I don’t want to look back at my life when I’m 50 and realize that my whole life has been spent playing cards to win other people’s money . This is not the meaning of life I want.

I made a very radical decision: I only left $10,000 for myself as basic living expenses, and the rest was either donated or given to my parents as retirement funds. I wanted to force myself to start over this way. I was 23 years old and went back to school to study non-technical majors in English and philosophy. As the oldest student in the class, having nothing on my resume other than "professional gambler" really intimidated me.

This decision gave me a new perspective. While working as a software engineer in Silicon Valley, I made about $100,000 a year, much less than I did playing poker. But interestingly, my happiness didn’t change much. Because what truly brings satisfaction is learning new things, achieving personal growth, and forming genuine connections with those around you.

Similarities and Differences between Poker and VC

Host: From a professional poker player to a venture capitalist, this is a big change. How do you see the similarities and differences between the two fields?

Haseeb:

The most essential difference between venture capital and poker is the length of the feedback cycle.

• In poker, the correctness of decisions can be verified in a very short time. For example, when you decide that your opponent is bluffing and choose to call, the result will be revealed immediately.
• In the world of venture capital, the situation is completely different. The quality of an investment decision often takes six to seven years to be truly clear. Just like what we often see: a startup company seems to have a smooth journey from seed round to round A, but it may suddenly encounter a fatal crisis in round C. This delayed feedback mechanism places extremely high demands on investors’ judgment. It is worth mentioning that it was precisely by relying on rigorous judgment that we successfully avoided projects such as FTX, BlockFi, and Luna that eventually collapsed.

Host: It sounds like the feeling will be very different when the judgment is correct, right?

Haseeb:

Indeed. The difference is very obvious. In poker or trading, the reward for making the right decision is immediate and intense, producing an immediate hit of dopamine. The sense of accomplishment of "I won" comes very directly.

But in venture capital, success is a gradual process. It’s more like nurturing a tree: there’s no dramatic climactic moment, but constant patience and commitment. You will see startups grow step by step: each round of financing brings a steady increase in valuation, continuous improvement in operating indicators, and joint efforts to find solutions when encountering challenges.

This process requires investors to have great patience and persistence. Unlike the quick victory or defeat 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 progressive growth process that makes venture capital work particularly meaningful.

investment judgment

In the field of venture capital, judgment on people is often more critical than analysis of business models . While investment luminaries like Naval Ravikant or Chamath Palihapitiya often emphasize the need to break through stereotypes , the actual judgment process is much more complicated. As an experienced investor, I see an important paradox in this.

Junior investors usually need to go through a cognitive process: understanding business models and technological innovation does require continuous learning and in-depth research, which often requires the construction of a systematic analysis framework by studying the history of technology and business history. But interestingly, understanding human nature is an innate ability we are born with.

Our nervous systems are wired with the ability to read other people. When you feel distrustful of someone, even if you can't pinpoint the specific reason, it often stems from a combination of subtle signals you're receiving.

However, junior investors often ignore this intuitive judgment and instead rely too much on superficial evidence:

• "Maybe it's because I don't have enough experience and my judgment is not accurate enough."
• "The founder has an excellent resume and a sound business plan"
• "He has the endorsement of so many well-known partners"

As you gain experience, you will come to realize that you need to learn to trust your intuition . The key is to see beyond superficial social credentials to perceive a person's essential characteristics and consider the choices he or she might make in the face of stress, uncertainty, and moral dilemmas. Often, your first instinct is correct.

stereotype

Venture capital is essentially an industry about people. While the field of social psychology faces a "reproducibility crisis," "stereotype accuracy" is one of the most robust research findings. For example, when you feel that highly aggressive people tend to lack reliability, this judgment is often accurate.

The human brain is a system that is constantly learning statistically. Although contemporary culture tends to dismiss stereotypes, stereotypes can actually be positive, negative, or neutral. For example, the stereotype "Asians prefer rice" is neutral and statistically accurate.

investment motivation

Moderator: What drives you to continue to invest in these areas that have not yet been fully developed?

Haseeb:

Essentially, the areas I've been involved in, both in the early days of poker and now in cryptocurrencies, have two distinguishing characteristics: a high degree of chaos and creativity. This is fundamentally different from the traditional linear development field. For example, quantitative analysis on Wall Street is essentially an intellectual competition. Whoever has a higher "score" will get more rewards.

In an emerging field like cryptocurrency, it is more like exploring an unknown continent. This 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 my passion going.

There is no so-called "aristocracy" in the crypto industry . Unlike traditional VC, you don’t need a prominent background or a huge network of contacts, or even experience in starting a billion-dollar company. Sincere dedication and continuous hard work are the keys to success.

The bear market is like a mirror that can clearly show who comes with sincere intentions and who is silently persisting . Every bull market will attract a group of successful Web2 entrepreneurs with large amounts of capital, but in the end, those who stay are often those who are considered "alternative" or "crazy". They are the ones who really build valuable projects. .

some thoughts

structured learning

Moderator: 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.

Structured learning is characterized by 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 development of self-discipline and concentration. In fact, most of what 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 straight to job hunting, you 'll quickly discover that whatever you learned in school is almost useless. 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 those positions that can create high added value, there are often no ready-made instruction manuals or training materials. You cannot prepare systematically for an exam the way you prepare for an academic exam. This requires practitioners to continuously explore and learn in unknown fields. Even if there are experts in the field, they often do not have enough time to transfer knowledge systematically.

Moderator: Can you give an example of the application of unstructured learning in practice?

Haseeb:

• I was introduced to this way of learning early on. When I started playing poker in 2006, there were very few educational resources in this area. Although there are some books, they are not good enough. If you want to become a world-class poker player, you can only glean bits and pieces of information from blogs, forums, and videos. You have to teach yourself, experiment and take risks, invest your own money, learn from your failures and iterate.
• The same was true six or seven years ago in the cryptocurrency space. At that time, there was only "Mastering Bitcoin" and a textbook from Princeton (the author was the co-founder of Arbitrum), and Ethereum only had a few words in that book. To learn these contents, you can only practice it deeply, communicate with people at the forefront, create your own course system and continuously iterate.

This kind of unstructured learning is often the most valuable and most market-rewarded . Those who can master this kind of learning usually get the highest rewards, and this is exactly what school education does not teach us.

Money can't buy happiness

Host: You said before that "money can't buy happiness", can you elaborate on that?

Haseeb:

I started playing poker professionally when I was 17. At that time, I knew a lot of young, wealthy people, but they were all miserable. In the poker world, you will see people in their 20s who are worth millions. They buy luxury cars and watches, but no one cares. There's no point in buying these things if you're just buying them for a status symbol rather than actually enjoying them. Money can indeed solve your financial problems, but research shows that after a certain income level (say, $50,000-$100,000 per year), happiness growth drops off sharply.

People 's happiness comes more from personal progress, growth, and connections with others - friends, family, and relationships. This 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 getting into EA after I quit poker, which was around 2012-2013, when the sport was just getting started. During the FTX era, EA became very "cool", which made me a little uncomfortable, because EA is essentially a very alternative concept. Now with the collapse of FTX, the situation is completely opposite.

It's a bear market for EA right now, which is healthy to a certain extent. When EA is "cool", people will question the motives of those who join. But now people who say they are EA will be questioned, which can test 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 in depth and may easily misunderstand. This does make working in EA or cryptocurrency more difficult, but it is important to stick to core ideas and values.

Thoughts on Cryptocurrency

Moderator: Do you have any unique insights 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 left to the discretion of individuals, or should it be controlled by the state? The problem goes far deeper than the actions of one Bahamian businessman.

I did not join this field out of libertarian convictions. In fact, I'm not even sure cryptocurrencies are ultimately good for the world. It may bring more chaos: weakening the country's control over monetary policy and increasing the risk of hacker attacks. Especially in the era of AI, unchecked and unstoppable capital flows may have dire consequences.

But the point is, the growth of cryptocurrencies is inevitable . Just like social media, whether people think it is good or bad, it has become part of reality.

**Moderator: You mentioned that cryptocurrencies are very different from

other technologies?**

Haseeb:

Yes, this is the most unique thing about cryptocurrencies. Most technological innovations of the past 50 years have strengthened state power. Think about the Internet and artificial intelligence, which all enhance the government's control capabilities to some extent.

But cryptocurrencies are inherently disruptive. Just as YouTube upended the monopoly of traditional television stations, cryptocurrencies are creating "user-generated currency." If money were inherently free and programmable, we wouldn't need cryptocurrencies at all. Its very existence is a response to government restrictions.

Most people believe that technology should eventually be "tamed" by governments. But what’s unique about cryptocurrency is that its core value lies in not being tamed. This makes many people uncomfortable and is why some people try to discuss blockchain technology separately from cryptocurrencies.

If we look at the Snowden revelations, we see that the Internet has actually enhanced government surveillance capabilities . In contrast, cryptocurrency may be the only major technological innovation in the past 50 years that truly serves individuals rather than nations.

key to success

Moderator: Can you share the key principles for success in cryptocurrency?

Haseeb:

1. The first principle is to improve technical understanding. While everyone’s skill level is different, cryptocurrency is essentially a technological innovation. Without understanding the technology, you cannot build robust mental models to predict where the industry will develop. You don’t need to be a top smart contract developer, but you do need to at least understand the basic workings of programs and computers. This will allow you to determine what is feasible and what is a false promise. In this area, 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 to start sharing. This is a huge mistake. I started blogging when I was new to cryptocurrencies. Looking back at those early articles, they were indeed childish, but that didn’t matter. because:

• No matter what stage of learning you are at now, there is always someone who needs the basics more than you do
• It’s a good thing that no one pays attention in the early days, it gives you room to practice.
• Make 1% progress every day, and the accumulation after one year will be amazing

Advice for newbies

Host: What is the most counter-intuitive fact for new investors?

Haseeb:

The most important thing to realize is that almost all important crypto projects are created by crypto natives, not the elite from Google or Harvard. Whether it's Ethereum, Uniswap or other important projects, they are all created by "weirdos" who are deeply involved in cryptocurrency. These people may seem "too Internet obsessed," but they are the ones who build the most important projects.

Host: So, how to become a cryptocurrency native?

Haseeb:

The key is to find your unique strengths. Don't try to completely reinvent yourself and become another Vitalik, or learn complex zero-knowledge proofs. Instead, you should:

• Identify your areas of expertise
• Take advantage of this advantage
• Find the crypto projects or people who need this skill most
• Prove your value with practical actions

It's like starting a business, don't imitate other people's paths, but find a unique positioning based on your own strengths. Instead of thinking "How do I get that cool-looking guy's job?" think "What value can I bring to this industry?"

Host: Does this sound a lot like entrepreneurial thinking?

Haseeb:

Yes, it’s exactly the same as starting a business. When starting a business you ask yourself: What am I good at? What problem can this skill solve? You will choose a field that you are passionate about and good at, rather than blindly becoming 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 started running Twitter, I thought the number of fans equaled influence. But later it was discovered that many high-fan accounts were actually just "content farms". Although the number of interactions was large, their actual influence was very small. Interestingly, real industry leaders often don’t have many followers. This is actually a phenomenon called "Buton's Paradox": in extreme cases, the two originally related factors (number of fans 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 be really good at creating content and entertainment, but when they really want to make something happen, they often fail to do so. For example, an account with 5 million fans wants to push the price of a certain currency up, but no one responds.

On the contrary, some accounts with few fans 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. Social media attention cannot be used to judge influence.

• Many people admire high-fan accounts and think they must be very influential.
• But in fact, the actual influence of many high-fan accounts is limited.
• This often causes these account owners to experience a "sober realization"

2. The relationship between fan growth and influence is non-linear

• When you go from 200 to 2,000 fans, you can really feel the obvious changes.
• 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 continuing to invest in rising fans is very low.

Host: So, how do you really build influence?

Haseeb:

Many people think that establishing influence in the cryptocurrency community is through self-promotion, showing off connections, or quickly cashing out pre-sale projects. But actually, the real method is:

• Create value for the industry
• Help founders solve problems
• Do meaningful things behind the scenes
• Deliver value with every interaction

This is indeed much more difficult than simply posting, which is why most people can't really build influence - because most people are takers rather than givers.

VC’s experience and reflection

The cryptocurrency industry attracts a diverse range of players, from day traders seeking short-term gains, to professional hedge fund practitioners, to entrepreneurs working on innovative projects and venture capitalists supporting innovation. The industry often exhibits characteristics of a zero-sum game, like a "player versus player" (PVP) game. Long-term participants may face mental challenges, are prone to cynicism, fall into nihilistic thinking, wander in periodic false prosperity, and bear the psychological pressure of rapid cash realization.

However, venture capital plays a unique role in this industry, which is essentially a zero-sum game. VCs drive team success by identifying outstanding talents and providing necessary support. The success of VC depends entirely 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 team 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 the transformation process?

Haseeb:

Yes, this feeling is always there. I feel that if a person doesn't feel this way at all, he either doesn't think deeply enough or lacks self-reflection. The key is not to overcome the feeling, but to learn to live with it. When I first became an investor, this feeling was particularly strong - "I have never built a successful company, so why should I give advice to others?" But interestingly, it is precisely this "outsider" perspective that allows me to Seeing problems that founders may not see.

When you make recommendations as an investor, you tend to get special attention. For example, a company may have obvious problems, such as a poor marketing strategy or product positioning, that are obvious to everyone within the company but may be invisible to the founders. And when investors—even relatively junior investors—make the same suggestion, they are often taken seriously by the founder.

Part of this "magic" comes from the investor's external perspective, which is not affected by the company's internal "gravitational field." For example, Polygon was operating six different product lines at the same time for a while. I told the founders: "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 received positively response, although I'm probably not the only one to suggest this.

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 "breakout moment." VC is a process of continuous accumulation day after day. Even when receiving a check when a project exits, it feels more like "finally here" than "wow, I can't believe it." This characteristic makes VC healthier than other investment methods.

Host: How does it feel to make a mistake? Can you share a specific example?

Haseeb:

In the VC industry, the biggest mistake is often not making wrong investments, but missing out on good projects. Because VC follows a power law distribution, missed opportunities are more fatal than failed investments.

For example, what I regret most is that I missed Uniswap’s Series A financing. At that time we analyzed all the data:

• Profitability of liquidity pool
• trading volume
• Advantages and Disadvantages of Pricing Mechanism

Our analysis was all "smart" and all "right", but we completely missed the most important point: **the revolutionary innovation brought about by Uniswap

• a fully automated system where anyone can 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 good projects
• Or regret not investing more
• Either worry about selling too early or too late

But this discomfort is normal and even a good thing. If you're too comfortable, it might actually be a red flag.

As a VC, I have become relatively comfortable with timing my exit from the market. The key is to understand:

• Don’t chase the perfect exit moment
• Set reasonable goals: For example, if you exit within 40% of the highest point, you will be very successful.
• Excessive pursuit of accuracy is dangerous and may lead to missing the entire cycle
• It is impossible to accurately copy the bottom or top

Maintenance of public image

Host: As a public figure, how do you deal with drastic changes in external evaluation?

Haseeb:

It's really challenging. Take 2021-2022 as an example. The overall image of the cryptocurrency industry has undergone a huge change. 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're no longer invited to parties and people don't want to have much contact with you.

As a VC, it does matter what other people think of you because it’s your business. But I've found that the best way to deal with this situation is:

• Be transparent
• speak your true thoughts
• Continuously create value

In this industry, you're bound to offend some people. I pissed off: Solana community, Cardano community, and other major project communities. But there is a characteristic of this industry: memory is very short. For example, I once wrote a critical article about EVM (Ethereum Virtual Machine), and the Ethereum community was very angry with me at that time. Now, many people think that I am an Ethereum maximalist.

When faced with controversy, ask yourself: "Is this a fight I really care about?" If not, delete the content and move on. In this rapidly evolving industry, you don’t have to be truthful about every controversy.

future outlook

Host: Looking forward to the next 12 months, what are you most concerned about?

Haseeb:

From a macro level, the market direction will largely depend on the policy trends of the Federal Reserve. The institutionalization process of cryptocurrency is an irreversible trend, but this process will be relatively gradual and is unlikely to experience violent fluctuations.

Of note is the shift in institutional attitudes. Take BlackRock as an example. From 2019 when we were still struggling to seek their recognition, to now they have become an active advocate of Bitcoin ETFs. This transformation 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 predict that the growth trend in the next two to three years will be more rational. However, it should be pointed out that the cryptocurrency market has its own uniqueness. Once it enters a new market cycle, the market direction may exceed conventional expectations. This shift may result from an adjustment in risk appetite or a change in the interest rate environment. Overall, I am cautiously optimistic about the cryptocurrency market but expect less volatility than the 2021 cycle.