Dragonfly Partner: BTC is Intergenerational Wealth, Firmly Bullish on ETH and SOL

Original Article: If You Want To Get Rich, Hold Bitcoin

Translation by: CryptoLeo (@LeoAndCrypto)

Editor's Note: As the crypto industry hits another low and many early OG participants choose to exit, Dragonfly Capital partner Haseeb Qureshi recently discussed the current state of crypto and a phased understanding of the industry in an interview. From talent flow and Silicon Valley culture to industry recency bias, from the growth narratives of ETH and SOL to the explosive potential of Hyperliquid, Haseeb also explained the significance of persisting as a crypto "Settler" in an era dominated by AI capital. It remains a confidence-boosting piece. Given the conversational nature of the dialogue, this article adopts a first-person narrative format. Odaily has compiled and translated the interview content as follows:

Some crypto OGs are leaving, it's normal. I still insist on being a Settler!

I feel tired, very tired. A lot has happened recently – market declines, internal company issues.

I was chatting with friends some time ago, and they unanimously agreed that being a VC is a very decent job. Most VCs just choose good investments and wait, enjoying leisurely time. But that's not the reality, at least not at Dragonfly. We work harder than they think.

Someone just told me that compared to other VCs, I react very quickly. I often communicate work matters on the phone, always doing things, that's how we operate at Dragonfly. This is the secret to our profitability in many investments – because we work harder than others. Not everyone can do this, especially persisting for many years.

Many people are exiting now, like Kyle Samani leaving Multicoin, and many other OGs leaving the crypto space.

But don't overstate this. People always exit crypto. This week alone, I've had 4 or 5 different people tell me their feelings, believing the current market sentiment is worse than the post-FTX collapse sentiment. I think this is pure recency bias. The decline is happening now, so it feels worse. (Odaily Note: Recency bias is a cognitive bias where people overweigh recent events in decision-making or impression formation, neglecting long-term data or historical patterns.)

Why do I say this? Back when FTX collapsed, far more people exited crypto. They lost a lot; their pursuits like the metaverse and blockchain gaming didn't materialize, so they left.

The idea that people leave crypto seems unique, but every time prices drop, people exit. Another point is that there's a normal tenure in a person's career. If someone has been in a field for 10 years, choosing to leave is quite normal. Especially for someone like Kyle, a very successful venture capitalist; God knows how much he's made. For him, money no longer matters; it's about proving his value. Multicoin was one of the largest FTX investors. When FTX collapsed and SOL plummeted from over $200 to $8, and everyone thought Multicoin was wrong, they persevered and proved themselves one of the best investors in the field – a career pinnacle. Kyle's exit doesn't mean he's completely disillusioned with crypto.

Another point is that there's a big difference between pioneers and settlers. It's a law of human nature. Those who struggle westward to find California and open up new worlds are not the ones who eventually build the towns. Similarly, in a startup, the psychological state of the first 10 employees is completely different from the 50th, 100th, or 1000th. The people who joined Google early and built from scratch are not the same as those who later managed Google Shopping or Google Drive. They are completely different types of Builders.

Getting back to recency bias, the most insidious bias for an investor is the status quo bias. People tend to believe the current state will persist because if it weren't robust, it wouldn't be the status quo. But the tech world is full of change now, especially with AI making everyone think, "Wow, everything could change."

A few years ago, people discussed the "Great Stagnation." Peter Thiel wrote a famous article about lots of innovation in the digital/software world versus stagnation in the physical/real world. Now, we see progress in life extension, CRISPR-Cas9 gene editing, AI, drones, quantum technology, and nuclear reactors. Suddenly, there's renewed momentum, which is very beneficial for society.

For investors, the most common failure mode is still not believing that the status quo will change significantly.

The Silicon Valley model is unique, enabling trust and transfer across companies

Talking about what I learned in Silicon Valley is hard to describe. It's more like an operational method, a unique way of thinking. Many cities worldwide say, "We want to be the next Silicon Valley," and I chuckle every time I hear it.

I think the Silicon Valley model has only been replicated in maybe two places: one is China, and the other is Israel. Few other places have figured out how to construct this model.

The most important aspect of the Silicon Valley model is celebrating failure. In Silicon Valley, failure is normal; it doesn't disgrace you. You get a chance for a comeback after failure. This is nearly impossible elsewhere. Other places might say "failure is okay" on the surface, but treat you like a loser. If you quit a big company to start a business and fail, people will ask why you left Deutsche Bank or SK Telecom, gave up a good job for a startup, and that failure becomes a lifelong stain. That kind of mindset is wrong.

Another key element of Silicon Valley is extremely high trust. This is also rare elsewhere. Although America loves lawsuits and litigation, people in Silicon Valley rarely sue each other. Silicon Valley is an ultimate melting pot of ideas. People inevitably borrow ideas from others, but everyone is more willing to act quickly and share. Even if ideas get borrowed occasionally, it's fine. Everyone should strive in the same direction, focused on building the whole, without being overly fixated on details. If you have an idea, act fast, trust others, trust the right direction, and trust that people around you won't harm you.

There's a very strong kinship within Silicon Valley that people often overlook. In California, non-compete agreements are unenforceable, allowing talent to flow freely. Elsewhere, it's the opposite; non-compete clauses lock people tightly into companies. Many companies don't want trade secrets leaked, don't want employees transferring information from here to there. Silicon Valley takes a holistic view: "This is good for all companies. Even if someone might steal knowledge from my company and transfer it elsewhere, harming my interests, the extremely high efficiency of information transfer is, on the whole, good for society."

Because of this, knowledge flows incredibly fast in Silicon Valley. AI Labs are almost all in Silicon Valley. Everyone "leaks" secrets and communicates, and as a result, all top AI Labs are at similar levels, and most models are free. This is impossible elsewhere. This is the true power of Silicon Valley: sharing, not hoarding.

Crypto is technology. We must learn "long-term greed" from the flow of money

Cryptocurrency is essentially technology. Bitcoin is software that people run on their computers; everything we build is software.

Its operation isn't necessarily identical to software companies. There are obvious differences between Microsoft, Bitcoin, Ethereum, or Aave. But we can learn vast lessons from the tech industry: understanding the characteristics of efficient teams, how technology is adopted, and what growth curves and retention curves need to look like to ensure sustainability. These directly apply to the crypto space.

But cryptocurrency is also about money, society, and governance. To truly understand crypto comprehensively, people need to learn a lot from these other fields.

It's not just a technical issue. We've experienced the internet bubble and its burst. Both were related to excessive expectations and finance – involving capital flows. We also know crypto is deeply tied to money and capital. If you don't understand financial elements, you can't see the big picture.

Technology provides incredibly rich information, but not all crypto practitioners have this perspective, especially pure traders who might lack this viewpoint.

Bankless co-founder David Hoffman once wrote a profound article saying: "The point of crypto is not to make you rich; it's to make you free."

There's nothing wrong with wanting to make money. Everyone wants to make money; I want to make money too. Freedom and liberation certainly include the freedom to make money and the freedom to act in one's own interest. No industry or market has ever required people to act against their own interests.

When problems arise in the crypto space, people often say someone got greedy. Binance got greedy, Wintermute got greedy, entrepreneurs got greedy, VCs got greedy. Someone's greed is the reason for the price drop. This view is too shallow. No market requires people not to be greedy. As long as you are creating value, building the right things, and doing so sustainably, it's fine.

Former Goldman Sachs partner Gus Levy famously said: "We're greedy, but we're long-term greedy." In contrast, short-term greed is actually very foolish, like King Midas in the story. Dealing drugs, for example, is short-term greed. It's not viable long-term. Pure traders aren't wrong, and long-term holders aren't wrong either. Let's see who lasts the longest.

The exponential growth of crypto ultimately led me to choose and persist in this industry

I entered the crypto industry full-time in 2017, during the ICO heyday. I started in venture capital in early 2018, right as the ICO bubble began to burst.

When I started investing, everything was bleak. 2018 was probably the worst sentiment I've seen in the crypto space, worse than the FTX collapse. When FTX collapsed, at least people felt there was a reason – SBF deceived everyone and caused the industry's decline. But in 2018, there was no one to blame. Bitcoin went from $19,000 to $4,000. Ethereum prices crashed below $100. At that time, we all had a very strong feeling: we were deluding ourselves; everything about crypto was a collective hallucination.

But I had a strong conviction deep down that made me choose and persist in the crypto industry and become a VC in the space.

The period from 2018 to just before the COVID outbreak was very quiet. There was no recovery in the crypto industry; it was in the dark. But we could see the beginnings of DeFi, with MakerDAO and Compound starting to gain traction. Their momentum wasn't huge, but they were slowly influencing the industry.

Back then, I believed in crypto's exponential growth, believing that something far grander and more important than what we had seen was going to happen in the future. This technology would impact far more than 100,000 people (the number using blockchain at the time was under 100,000).

You have to believe that the scale of the industry will grow exponentially. If I had told someone back then that I thought the US government would buy Bitcoin, it would have sounded like science fiction. After the FTX incident, we were genuinely worried the US might ban cryptocurrencies.

So, after all this, I've experienced one dark moment after another in this industry. I often look inward and ask myself why I believe in this industry. I used to be a poker player. The most important lesson I learned from poker is strategy. You can't guarantee winning every hand, but you need a correct strategy, one that can beat your opponents. In my view, my strategy is to believe in the exponential growth of crypto and to envision that the crypto space 10 years from now will be vastly larger than today, just as the crypto space 10 years ago was vastly larger than when Bitcoin was born in 2008.

That's why I think it's important to believe in the power of exponential growth and to look at current events from a macro perspective, rather than focusing solely on surface appearances at any given moment.

Bitcoin is also generational wealth; that's one reason I believe in it

Furthermore, another reason I still support crypto and Bitcoin is the entry of institutions and governments. Very few institutions actually hold crypto. We manage massive assets, primarily from institutional partners who gain exposure through us, but this represents less than 1% of their portfolios. Institutional adoption and asset management's embrace of crypto are still in their early stages – Morgan Stanley only recently started allowing recommending digital assets to high-net-worth clients. Vanguard Group only recently approved Bitcoin ETFs.

Another thing to understand is that cryptocurrency is highly generational. Remember the FIT21 Act? It was the precursor to the Clarity Act, which initially passed the House. If you look back at when Trump was elected for a second term and observe the US Congress, you'll know the biggest predictor for voting for this bill was age.

The older generation doesn't know what cryptocurrency is. They only hear about it in the news. Their children are the ones using it. It's a generational inheritance. Baby boomers are aging, and they will pass their BTC to the next generation.

When I went to college, the concept of Bitcoin was quite novel. Kids entering college now don't remember a time before Bitcoin existed. Bitcoin is already 18 years old.

Changing people's first impressions of something is very difficult, especially when they resist trying it themselves. You can see this very clearly in the US Congress. These lawmakers don't really understand what these cryptocurrencies are. They've heard about it, read reports, and their kids have told them something. That's the total extent of crypto's exposure in Congress.

The total amount of gold might increase in the future, but Bitcoin is forever independent and irreplaceable

Talking about Bitcoin and gold, people have a really deep attachment to gold. "Gold has thousands of years of history; you can never replace it; it has too much Lindy effect." Thinking about my mom or grandma, their love for gold is unwavering. But for younger people, what they consider valuable is already digitized. Why would a stone meticulously mined from somewhere far away on Earth be more valuable than something digital?

Speaking of mining, consider this: SpaceX has explicitly stated that one way they intend to make a profit is by mining rare minerals from asteroids. The timeline for asteroid mining seems closer after their IPO. If you could get an asteroid containing gold, it could potentially double the Earth's gold supply. There isn't that much gold in the world. All the gold in the world could fit into a cube smaller than a football field. If gold were truly discovered on an asteroid, it would completely reshape the global gold market, and the impact would be permanent.

You won't find Bitcoin on an asteroid. Bitcoin is software. I think it's reasonable that for a software civilization, our currency should also be software-based.

Personally, I've had some investments at different times, but most of my assets are self-held. Sometimes, for taxes or other reasons, I need to sell some assets for cash, but for the most part, my personal finances are very simple. I've invested heavily in all our funds. As a General Partner, I must put my own money into all our future funds. Then I also personally hold some crypto, ETFs, that's about it.

For me personally, I hold Bitcoin but don't invest in it as a risk asset. I believe the core of Bitcoin lies in decentralization. It relies entirely on consensus, not the PoW kind of consensus, but a social consensus that needs to be reached: that Bitcoin will be our future way of measuring non-sovereign wealth. This might be inevitable.

People complain a lot when Bitcoin's price drops, but the reality is that Bitcoin and crypto are usually very changeable. They change form and correlate with different assets at different times: sometimes it correlates with gold, sometimes with the Nasdaq, and sometimes with nothing. It just does its own thing, switching between these different states.

If you look back at Bitcoin's history, it's very obvious that its performance isn't always consistent. So, there are two competing viewpoints:

One view is that it should perform like gold – gold goes up, Bitcoin goes up.

Another view is that Bitcoin is an asset correlated with no other.

If Bitcoin acts like gold, why buy Bitcoin? Just hold gold.

The reality is, if you just compare Bitcoin to gold or the Nasdaq, you'll see their charts are very close. Before 2011, their correlation was very high. After 2011, the correlation disappeared. If you look back, you'll see Bitcoin performs differently from any other asset. In certain periods, its performance resembles others, but most of the time, it's clearly unique. Bitcoin is an independent asset with its own cycles.

I think, over the next 10 years, people will keep talking, complaining, and asking, "Why isn't Bitcoin rising more?" This won't stop until Bitcoin's adoption curve is truly saturated, and that will take a very long time.

I know many people who entered the crypto space around the same time as me but didn't make money. How could you enter this industry during a crypto winter and still not make money? The answer is simple: you just didn't stay in the market. If you persist in the market, you will make money.

In a way, this is one of the advantages of venture capital. VC forces you to stay