Original Title: How to get Rich by mastering crypto investing (without getting lucky) - Dragonfly Managing Partner

Original author: When Shift Happens

Original translation: Yuliya, PANews

Personal Background

Haseeb:

I am Haseeb Qureshi, currently serving as the Managing Partner of Dragonfly Fund, a global cryptocurrency investment firm managing billions of dollars in assets. Speaking of my career, it can be said to be quite dramatic: starting as a professional poker player, transitioning to a software engineer, then becoming an entrepreneur, and finally entering the VC industry for over six years. Among all my professional experiences, cryptocurrency investment, although the most challenging field, is also the most valuable and meaningful choice for me.

Host: What prompted you to ultimately decide to give up your poker career?

Haseeb：

It was a very chaotic period. I had established a considerable reputation in the poker world, but my reputation took a serious hit due to an incident involving cheating by one of my students. At the same time, I was becoming more and more tired of poker. I don’t want to look back on my life at 50 and realize that I spent my whole life playing cards and winning other people’s money. This is not the meaning of life that I want.

I made a very radical decision: I only left myself $10,000 as basic living expenses, and either donated the rest or gave it to my parents as retirement funds. I want to force myself to start over in this way. At that time, I was 23 years old, and I returned to school to study non-technical majors such as English and philosophy. As the oldest student in the class, my resume had nothing but ‘professional gambler’, which really made me panic.

This decision has given me a new perspective. While working as a software engineer in Silicon Valley, my annual income is about 100,000 US dollars, much less than when playing poker. But interestingly, my sense of happiness has not changed much. Because what truly brings satisfaction is learning new knowledge, personal growth, and building sincere connections with people around me.

Similarities and Differences between Poker and VC

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

Haseeb：

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

In poker games, the correctness of decisions can be verified in a very short time. For example, when you judge that the opponent is making a false show and choose to call, the result will be revealed immediately.

· However, in the field of venture capital, the situation is completely different. The quality of an investment decision often takes six to seven years to truly clarify. It’s like the common scenario we often see: a startup seems to have a smooth journey from seed round to Series A, but may suddenly encounter a fatal crisis in Series C. This delayed feedback mechanism places extremely high demands on the judgment of investors. It is worth mentioning that it is relying on rigorous judgment that we have successfully avoided projects such as FTX, BlockFi, Luna, which ultimately collapsed.

Host: The feeling when the judgment is correct will also be very different, right?

Haseeb：

Indeed. This difference is very obvious. In the poker or trading field, the rewards of making the right decisions are immediate and intense, leading to a direct dopamine rush. The sense of achievement of ‘I won’ is very direct.

But in venture capital, success is a gradual process. It’s more like cultivating a tree: there’s no dramatic climax, but it requires continuous patience and investment. You will see startups growing step by step: each round of financing brings a steady increase in valuation, continuous improvement in operational metrics, and a joint search for solutions when facing challenges.

This process requires investors to have strong patience and perseverance. Unlike the quick victory or defeat determination in poker, venture capital is more like a marathon, testing long-termism and the ability to create sustained value. It is this gradual growth process that makes venture capital work particularly meaningful.

Investment Judgment

In the field of venture capital, judgment of individuals is often more critical than analysis of business models. Although investment gurus like Naval Ravikant or Chamath Palihapitiya often emphasize the need to break stereotypes, the actual judgment process is much more complex. As an experienced investor, I have discovered an important paradox in this regard.

Novice investors usually need to go through a cognitive process: understanding business models and technological innovation indeed requires continuous learning and in-depth research, which often involves building a systematic analytical framework through the study of technological and business history. But interestingly, understanding human nature is an innate ability for us.

Our nervous system is naturally equipped to interpret others. When you feel distrustful of someone, even if you can’t pinpoint the exact reason, this feeling often stems from a combination of subtle signals you receive.

However, novice investors often overlook this intuitive judgment and instead overly rely on surface evidence:

· “Maybe it’s because of my lack of experience, and my judgment is not accurate enough”

· “The founder’s resume is impressive, and the business plan is well-prepared.”

· “He has the endorsement of so many well-known partners”

As you gain experience, you will gradually realize: learning to trust your intuition is crucial. The key is to see through superficial social validation and perceive a person’s essential qualities, considering the choices they may make when facing pressure, uncertainty, and moral dilemmas. In most cases, your initial intuition is often correct.

Stereotype

Venture capital is essentially an industry about people. While the field of social psychology is facing a “reproducibility crisis,” “stereotype accuracy” is one of the most robust findings in research. For example, when you perceive highly aggressive individuals as lacking reliability, this judgment is typically accurate.

The human brain is a system that constantly engages in statistical learning. Although contemporary culture tends to negate stereotypes, stereotypes can actually 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 constantly engage in these untapped fields that have not been fully developed?

Haseeb:

Fundamentally, the fields I have been involved in, whether it’s early poker or now cryptocurrency, share two distinct features: high chaos and creativity. This is fundamentally different from traditional linear development fields. For example, doing quantitative analysis on Wall Street is essentially an intellectual competition, where the higher the “score”, the greater the return.

And in emerging fields like cryptocurrencies, it’s more like exploring an unknown continent. Here, it requires not only extraordinary wisdom, but also the courage to take risks, the ability to innovate continuously, and the insight to integrate multidimensional information. It is precisely this challenging environment that keeps me passionate.

The crypto industry has no so-called “aristocracy”. Unlike traditional VCs, you don’t need a prominent background or a huge network of connections, or even experience founding companies worth hundreds of millions. Sincere dedication and continuous effort are the key to success.

The bear market is like a magic mirror, it can clearly show who comes with sincere intentions and who persists silently. Each bull market will attract a group of successful entrepreneurs from Web2 with a large amount of capital, but those who can stay are often considered as “alternative” or “crazy” people, and they are the ones who truly establish valuable projects.

Some Thoughts

Structured Learning

Host: Can you talk about your understanding of learning methods?

Haseeb：

I believe that learning can be divided into two types. The first type is structured learning, and the other type is unstructured learning.

The characteristics of structured learning are clear learning paths and tool support. Taking chemistry as an example, it has a complete textbook system and supporting learning resources. Learners only need to follow the established path step by step. The key to this learning mode is the cultivation of self-restraint and concentration. In fact, most of us receive this type of training in the traditional education system. However, the real world often doesn’t care about your structured learning achievements. When you finish college and go directly to work, you will soon find that almost everything you learned in school is of little use. The education system is more like a qualification certification process, proving that you have the basic qualities to receive professional training.

In the real professional environment, especially in positions that can create high added value, there is often no ready-made guidebook or training materials. You can’t prepare for it like preparing for an academic exam. This requires practitioners to constantly explore and learn in unknown fields, even if there are experts in the field, they often do not have enough time for systematic knowledge transfer.

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

Haseeb:

I have been exposed to this learning method for a long time. When I started playing poker in 2006, there were few educational resources in this field. Although there were some books, they were not good enough. If you want to become a world-class poker player, you can only gather scattered information from blogs, forums, and videos. You have to self-study, experiment and take risks, invest your own money, learn from failures, and iterate constantly.

Six or seven years ago, the field of cryptocurrency was the same. At that time, there was only ‘Mastering Bitcoin’ and a textbook from Princeton (authored by the co-founder of Arbitrum), with only a few words about Ethereum in that book. To learn these contents, you could only immerse yourself in practice, communicate with people at the forefront, create your own curriculum system, and iterate constantly.

**This type of unstructured learning is often the most valuable and most rewarded by the market.**People who can master this type of learning usually receive the highest rewards, but this is precisely what school education has not taught us.

Money can’t buy happiness

**Host: You previously said “Money can’t buy happiness”, can you elaborate on that?

Haseeb：

I started playing professional poker at the age of 17. At that time, I met many young and wealthy people, but they were all very unhappy. In the poker world, you will see people in their twenties worth millions of dollars, buying luxury cars and watches, but no one cares. If you buy these things just as a symbol of status, rather than truly enjoying them, it is meaningless. Money can indeed solve your financial problems, but research shows that after a certain level of income (such as $50,000-100,000 per year), the increase in happiness sharply declines.

People’s happiness comes more from personal progress, growth, and connections with others - friends, family, and relationships. This may sound like a cliche, but it is true.

Effective Altruism

Host: What is your view on the Effective Altruism (EA) movement?

Haseeb:

After quitting poker, I started to get in touch with EA, which was in 2012-2013 when sports were just getting started. During the FTX period, EA became ‘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 reversed.

It’s a bear market for EA now, which is somewhat healthy. When EA is ‘cool’, people will doubt the motives of joiners. But now, claiming to be EA will be questioned, which can actually test people’s true beliefs in these ideas. Just like cryptocurrencies, FTX’s failure 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.

Host: How to address public misconceptions about these areas?

Haseeb:

This involves the distinction between philosophy and politics. Most ordinary people may not delve into the details and easily misunderstand. This does make work in the EA or cryptocurrency field more challenging, but it is important to adhere to core principles and values.

Views on Cryptocurrency

Host: What unique insights do you have into the nature of cryptocurrency?

Haseeb：

At the core of cryptocurrency is a philosophy that raises a fundamental question: should the flow of value and funds be freely controlled by individuals or by the state? The depth of this question far surpasses the actions of a Bahamian merchant.

I did not join this field out of liberal beliefs. In fact, I am not even sure if cryptocurrencies will ultimately benefit the world. It may bring more chaos: weaken the control of national monetary policy, increase the risk of hacker attacks, especially in the AI era, uncensored and unstoppable capital flows may bring terrible consequences.

But the key is that the development of cryptocurrencies is inevitable. Like social media, whether people think it’s good or bad, it has already become a part of reality.

Host: You mentioned that cryptocurrencies are very different from other technologies?

Haseeb:

Yes, this is the most unique aspect of cryptocurrency. In the past 50 years, most technological innovations have strengthened state power. Think about the internet, artificial intelligence, they have all to some extent enhanced government control.

But cryptocurrencies are fundamentally disruptive. Just as YouTube disrupted the monopoly position of traditional TV stations, cryptocurrencies are creating ‘user-generated currencies’. If money is inherently free and programmable, we don’t need cryptocurrencies at all. Its existence is a response to government restrictions in itself.

Most people think that technology should ultimately be “tamed” by the government. But the unique thing about cryptocurrency is that its core value lies in not being tamed. This makes many people uncomfortable, and is why some people try to separate blockchain technology from cryptocurrency.

If we look at the content revealed by Snowden, we will find that the Internet actually strengthens the government’s monitoring capabilities. In contrast, cryptocurrency may be the only major technological innovation in nearly 50 years that truly serves individuals rather than the state.

Key to Success

Host: Can you share the key principles of success in the cryptocurrency field?

Haseeb：

1. The primary principle is to enhance technical understanding. Although everyone’s technical level is different, cryptocurrency is essentially a technological innovation. Without understanding the technology, it is impossible to establish a robust mindset for predicting the direction of industry development. You don’t need to be a top smart contract developer, but you should at least understand the basic principles of programming and computer operation. This is the only way to judge what is feasible and what is a false promise. In this field, enhancing technical understanding is always the right choice.

2. The second important principle is to start writing and sharing publicly. Many people feel that they don’t have new ideas and want to wait until they have enough knowledge before they start sharing. This is a huge mistake. I started writing a blog when I first got into cryptocurrency. Looking back at those early articles, they were indeed very naive, but that doesn’t matter. Because:

· No matter what stage of learning you are at, there is always someone who needs basic knowledge more than you do.

· Early on, no one paying attention is actually a good thing, it gives you space to practice

· A 1% improvement every day, and the accumulation after one year is astonishing.

Newcomer Recommendations

Host: What is the most counterintuitive fact for new investors?

Haseeb:

It is important to recognize that almost all important encryption projects are created by industry natives, not elites from Google or Harvard. Whether it’s Ethereum, Uniswap or other important projects, they are created by ‘eccentrics’ deeply involved in cryptocurrency. These people may seem ‘too obsessed with the internet’, but it is precisely they who have established the most important projects.

Host: So, how to become a native of cryptocurrency?

Haseeb:

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

· Identify your area of ​​expertise

· Maximize this advantage

· Find the cryptocurrency project or person that needs this skill the most

· Prove your worth with real actions

It’s like starting a business, don’t imitate others’ paths, but find a unique position based on your own advantages. Don’t think about “how to get that cool person’s job”, but think about “what value can I bring to this industry”.

Host: This sounds a lot like entrepreneurial thinking?

Haseeb:

That’s right, it’s just like starting a business. When starting a business, you will ask yourself: What am I good at? What problems can this skill solve? You will choose a field that you love and are good at, instead of blindly doing the next Uber. Similarly, in career development, don’t try to replicate someone else’s career path, but plan your own path based on your strengths and weaknesses.

Number of Fans ≠ Influence

Host: When I first started managing Twitter, I thought that the number of followers equaled influence. But later on, I discovered that many high-follower accounts are actually just “content farms”. Although they have a high level of interaction, their actual influence is small. Interestingly, true industry leaders often do not have a large number of followers. This is actually a phenomenon called the “Buton Paradox”: in extreme cases, the two originally related factors (number of followers and influence) will diverge. Can you explain this in more detail?

Haseeb:

This is a phenomenon that many people can intuitively feel. Those accounts with millions of followers may indeed be good at creating content and entertainment, but when they really want to drive something, they often fail to do so. For example, an account with 5 million followers wants to promote a certain coin price increase, 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 at Dragonfly, is very low-key on Twitter and doesn’t even have a social media account, but he is a very influential figure in the industry.

Development curve of influence

This phenomenon tells us two things:

1. Influence cannot be judged by social media popularity.

· Many people admire high-profile accounts and believe that they must have a lot of influence.

· However, the actual influence of many high-fan accounts is limited.

· This often allows the owners of these accounts to undergo a “sobering realization”

2. The relationship between fan growth and influence is nonlinear.

· When it goes from 200 to 2000 fans, you can indeed feel a significant change

· But when it rises from 50,000 to 100,000, the actual impact may not change much.

** · ** This indicates that after reaching a certain critical point, the return on continued investment in gaining fans is very low

Host: So how do we truly build influence?

Haseeb：

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

** · ** Create value for the industry

· Help founders solve problems

· Do meaningful things behind the scenes

· Paying value in every interaction

It is indeed much more difficult than simply posting, which is also why most people cannot truly build influence—because most people are takers rather than givers.

Experience and Reflection of VC

The cryptocurrency industry attracts a wide range of participants, from day traders seeking short-term gains, to professional hedge fund practitioners, to entrepreneurs of innovative projects and venture capitalists supporting innovation. This industry often exhibits zero-sum game characteristics, like a player versus player (PVP) game. Long-term participants may face mental challenges, easily becoming cynical and falling into nihilistic thinking, lingering in cyclical false prosperity, and enduring the psychological pressure of quick cashing out.

However, venture capital plays a unique role in this industry, essentially a zero-sum game. VC drives team success by identifying top talent and providing necessary support. The success of VC is entirely dependent on the success of the entrepreneurial team, transforming the original “single-player game” into a “multiplayer game” due to this close interest relationship. This not only creates greater value but also provides practitioners with a healthier mindset and development model. This collaborative teamwork approach may be the best way to participate in this disruptive and critical industry.

Impersonation and self-awareness

Host: Have you ever experienced Impostor Syndrome during the transition?

Haseeb:

Yes, this feeling has always been there. I think if a person doesn’t have this feeling at all, either they haven’t thought deeply enough or they lack self-reflection. The key is not to overcome this feeling, but to learn to coexist 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 what’s interesting 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, you often receive special attention. For example, a company may have obvious problems, such as poor marketing strategies or product positioning, which are apparent to everyone within the company, but the founder may turn a blind eye to them. However, when an investor-even one with relatively little experience- makes the same suggestions, they often get the founder’s attention.

Some of this “magic” comes from the external perspective of investors, unaffected by the company’s “gravitational field”. For example, Polygon was operating six different product lines at the same time, and I told the founder, “There are too many product lines, the market will perceive it as chaotic, you need to simplify the product lines and make the story clearer.” This suggestion received a positive response, although I may not be the only one who made this suggestion.

Success VS Failure

**Host: In venture capital, what is the biggest “success moment”?

Haseeb：

To be honest, there’s no such thing as a “big bang 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” rather than “wow, unbelievable”. This characteristic makes VC a healthier investment method than others.

**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 the wrong investment, but missing out on good projects. Because VCs follow a power law distribution, missing opportunities is more fatal than failed investments.

For example, what I regret most is missing out on the Series A financing of Uniswap. At that time, we analyzed all the data:

· Profitability of the liquidity pool

· Trading Volume

** · ** Pros and Cons of Pricing Mechanism

Our analysis is very “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 investment

Haseeb: As an investor, you will never be completely satisfied because:

· Either regret missing a good project

· Either regret not investing more

· Either worry about selling too early or too late.

But this discomfort is normal, even a good thing. If you are too comfortable, it may be a danger signal.

As a VC, I am relatively calm about the timing of market exits. The key is to understand:

· Do not pursue the perfect exit timing

· Set reasonable goals: for example, exiting within the top 40% range would be a success.

· Excessive pursuit of accuracy can be dangerous and may lead to missing the entire cycle.

· It is impossible to accurately buy the bottom or sell the top.

Maintenance of public image

**Host: As a public figure, how to deal with the drastic changes in public opinion?

Haseeb：

It is indeed very challenging. Take the 2021-2022 as an example, the overall image of the cryptocurrency industry has undergone a huge transformation. Especially after the collapse of FTX, the entire industry has been affected. Due to my association with effective altruism, I have also been affected after the collapse of FTX. Suddenly, you are no longer invited to parties, and people are not willing to have too much contact with you.

As a venture capitalist, it is indeed important how others perceive you, because this is your business. But I find that the best way to deal with this situation is:

· Keep it transparent

· Speak your mind

· Continuous Value Creation

In this industry, you are bound to offend some people. I have offended: the Solana community, the Cardano community, and other major project communities. But this industry has a characteristic: short memory. For example, I once wrote a critical article about EVM (Ethereum Virtual Machine), at that time the Ethereum community was very angry with me. And now, many people instead think I am the biggest Ethereum maximalist.

When faced with controversy, you can ask yourself, “Is this the battle I really care about?” If not, delete the controversial content and move on. In this rapidly developing industry, you don’t have to get caught up in every controversy.

Future Outlook

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

Haseeb：

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

It is worth noting the change in institutional attitudes. Take BlackRock as an example. We were still seeking their recognition in 2019, but now they have become strong advocates for Bitcoin ETFs, which is quite significant. The progress made by the cryptocurrency industry in terms of institutional recognition over the past five years far exceeds the understanding of many market participants.

Based on the current market environment, I anticipate that the growth trend in the next two to three years will be more rational. However, it should be noted that the cryptocurrency market has its uniqueness, and once it enters a new market cycle, the market trend may exceed conventional expectations. This shift may stem from adjustments in risk appetite or changes in interest rate environment. Overall, I hold a cautiously optimistic attitude towards the cryptocurrency market, but I expect the volatility to be smaller than the 2021 cycle.

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