Podcast: If You Want To Get Rich, Hold Bitcoin

Original text translated by: CryptoLeo, odaily news

Editor's note: As the cryptocurrency industry once again falls into a trough with many early OGs choosing to exit, Dragonfly Capital partner Haseeb Qureshi recently spoke about the current state of crypto and his phased understanding of it in an interview. From talent flow, Silicon Valley culture, industry-related biases, to the growth narratives of ETH and SOL, and the explosive potential of Hyperliquid, Haseeb also explains the significance of sticking to being a "Settler" in the AI capital-absorbing era, making this an article that still boosts confidence. Given the frequent dialogue between the two, this article adopts a first-person narrative style, and the Odaily Planet Daily has recorded and translated the interview content as follows:

Some crypto OGs have left, which is normal; I'm still committed to being a Settler!

I'm feeling very tired, extremely tired. A lot has happened recently, with market declines and internal company issues.

Not long ago, I was chatting with friends, and they all agreed that being a VC is a very decent job, most VCs just wait after making their investment decisions and have leisure time, but that's not the case for us at Dragonfly; we work harder than they do.

Someone just told me that compared to other VCs, I react very quickly. I often communicate work matters via phone, always working, and that's how we do things at Dragonfly. That's why we've made a profit on many investments—because we work harder than others. Not everyone can maintain this, especially after many years.

Now there are many people exiting, like Kyle Samani leaving Multicoin, and a lot of OGs are also leaving the crypto space.

But don’t exaggerate it too much; some people always exit crypto. I've already experienced 4 or 5 different people this week telling me how they feel, thinking that the current market sentiment is worse than after the FTX collapse. I think this is entirely recent-bias; the decline is happening now, so it feels worse. (Odaily's note: Recent bias refers to the psychological cognitive bias that people give too much importance to recent information when making decisions or forming impressions, while neglecting long-term data or historical patterns.)

Why do I say this? More people left crypto after the FTX meltdown, they lost a lot, and the metaverse, chain games, etc. they were pursuing also didn't materialize, so they all left crypto.

The idea of people leaving crypto seems unique; every time the price drops, people exit. Another point is, there’s a normal term in a person's career. For instance, if someone has been in a field for 10 years, it’s normal for them to choose to leave. Especially for someone like Kyle, who is a very successful venture capitalist; who knows how much he has earned. For him, money is no longer important; what matters is proving his worth. Multicoin was one of the largest investors in FTX, and when FTX collapsed, SOL dropped from over $200 to $8. Everyone thought Multicoin was wrong at that time, but they weathered it and proved themselves to be among the best investors in the field, which is an incredible accomplishment in one's career. Kyle's exit doesn't mean he has completely lost faith in cryptocurrency.

Another point is, there's a significant difference between pioneers and settlers; it’s a human nature principle. Those who strive westward to seek California and explore new worlds are not necessarily the ones who will ultimately build towns. Similarly, the mental state of the first 10 employees in a startup is completely different from that of the 50th, 100th, or 1000th employee, just like the early builders at Google who started from scratch are not the same batch of people responsible for Google Shopping or Google Drive later. They are entirely different types of builders.

Returning to recent bias, as an investor, the potential bias is status quo bias. People tend to believe that the current situation will continue indefinitely because if it weren't robust enough, it wouldn't be the status quo. But now, the tech industry is full of changes, especially with AI making everyone feel: “Gosh, anything could change.”

Years ago, people were still discussing the “Great Stagnation”; Peter Thiel had a very famous article discussing how the digital/software world had a lot of innovations while physical/reality world innovation stagnated. And now, we see advancements in life extension, CRISPR-Cas9 gene editing, AI, drones, quantum technology, and nuclear reactors, suddenly there’s a momentum for progress, which is very beneficial for society.

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

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

When it comes to what I've learned in Silicon Valley, it's hard to describe; it's more like a mode of operation, a way of thinking unique to Silicon Valley. Many cities around the world say, “We want to be the next Silicon Valley”; every time I hear that, I want to laugh.

I think the Silicon Valley model may have only been replicated in two places: one is China and the other is Israel. Few other places can figure out how to build this model.

One of the most important aspects of the Silicon Valley model is celebrating failure. In Silicon Valley, failure is normal; it doesn’t leave people unable to hold their heads high. Failure creates opportunities for rebounds; that's almost impossible in other places. Other places may superficially say, “Failure is okay,” but treat you like a loser in reality. If you leave a big company to start your own venture and fail, others will question why you left Deutsche Bank, why you left SK Telecom, abandoning a good job for entrepreneurship; failure would become your lifelong stain. This mentality is wrong.

Another key point in Silicon Valley is the high level of trust. It's rare elsewhere; although lawsuits and court cases are common in the U.S., Silicon Valley rarely sees mutual lawsuits. Silicon Valley is an extreme melting pot of ideas, and people inevitably reference the thoughts of others, but everyone is more willing to act quickly and share generously. Even if ideas are sometimes borrowed, it’s okay; everyone should work towards the same goal, focusing on building the whole without getting overly entangled in minutiae. If you have an idea, act fast; you must trust others, trust the right direction, and believe that the people around you won’t harm you.

Silicon Valley has a strong kinship, which people often overlook. In California, non-compete agreements are unenforceable, allowing talent to flow freely. In contrast, other places lock people in with non-compete clauses. Many companies don’t want business secrets to leak, don’t want employees to transfer information from here to there. Silicon Valley looks at the big picture, “This is good for all companies, even if some people may steal knowledge from my company and move it elsewhere, harming our interests. Efficient information flow is good for society overall.”

Because of this, knowledge flows rapidly in Silicon Valley. Most AI labs are located in Silicon Valley, everyone “leaks” secrets and communicates with each other, resulting in all top AI labs being quite close in standards, and most models being free. This is something you can’t achieve elsewhere; this is the true power of Silicon Valley: sharing rather than self-preserving.

Crypto is technology; we need to learn "long-term greed" from the flow of money

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

Its operation may not necessarily be the same as that of software companies; there are obvious differences between Microsoft, Bitcoin, Ethereum, or Aave, etc. But we can learn a lot from the tech industry about the characteristics of efficient teams, how technology is adopted, and what forms growth curves and retention curves need to take to ensure sustainability, and all of this directly applies to the crypto space.

But cryptocurrency is also related to money; it concerns society and governance. To truly understand cryptocurrency, people need to learn a lot from these other fields.

This isn't just a technical issue. We have experienced the internet bubble and its burst, both related to overly high expectations and finance, involving capital and capital flow. We also know that cryptocurrency is closely related to capital and finance. If you don’t understand financial elements, you can’t see the big picture.

Technology provides an extremely rich source of information, but not all cryptocurrency practitioners share this perspective, especially those who are solely traders; they may lack this broader view.

In an article by David Hoffman, co-founder of Bankless, he mentioned a profound point: “The significance of cryptocurrency is not to make you rich; it is to give you freedom.”

There’s nothing wrong with wanting to make money; everyone wants to make money, and I want to make money too. Freedom and liberation certainly include the freedom to make money, to do things that align with your own interests. No industry or market has ever demanded that people act against their own interests.

People often say when they see problems arise in the crypto space that it’s due to greed. Binance became greedy, Wintermute became greedy, entrepreneurs became greedy, VCs became greedy—the existence of greed is the reason for price drops. This perspective is too superficial; no market demands people to be ungreedy. As long as you are creating value, building the right things and doing it sustainably, there’s no problem.

Gus Levy, a former partner at Goldman Sachs, famously said: “We’re greedy, but we’re long-term greedy.” In contrast, short-term greed is actually very foolish, much like the foolishness of King Damocles in the story. For example, drug dealing is a short-term greedy approach, but it is not sustainable long-term; pure traders are not wrong, nor are long-term holders; look at who lasts in the end.

The exponential growth of cryptocurrency is why I ultimately chose and remain in the crypto industry

I entered the crypto industry full-time in 2017, during the peak of the token issuance era. At the beginning of 2018, I started working in venture capital, just as the token issuance bubble was beginning to burst.

When I started investing, everything was in a downturn. 2018 was perhaps the worst year I had ever seen in the cryptocurrency space, worse than the aftermath of the FTX collapse, because when FTX went down, at least people could feel there was a reason; SBF deceived everyone and contributed to the industry’s decline. But in 2018, there was nothing to blame; Bitcoin's price dropped from $19,000 to $4,000. Ethereum's price plummeted below $100. At that time, we all had a very strong feeling: we were deceiving ourselves; everything in crypto was a collective illusion.

But a strong belief in my heart made me choose and stick with the crypto industry and become a VC in the field.

The period from 2018 until the outbreak of COVID-19 in 2020 was very calm. The crypto industry saw no recovery, remaining in darkness. But during that time, we could see DeFi starting to take shape, with Maker DAO and Compound beginning to scale. Their development was not significant, but it was slowly impacting the industry.

At that time, I believed in the exponential growth of crypto, trusting that grander and more significant things would happen in the future than what we were witnessing then. The technology would affect far more than 100,000 people (the number of blockchain users at the time was still under 100,000).

You must believe that the industry’s scale will experience exponential growth. If I were to tell someone back then that the U.S. government would buy Bitcoin, it would have been seen as ridiculous. After the FTX incident, we truly worried whether the U.S. would ban cryptocurrency.

So, after experiencing so much, I’ve gone through one dark moment after another in this industry, and I often examine my inner self, questioning why I believe in this industry. I used to be a poker player, and the most important lesson I learned from poker is strategy. Playing poker doesn't guarantee you win every hand, but you need the right strategy to ensure your strategy can win against opponents. To me, my strategy is to believe in the exponential growth of crypto, and to build the scale of cryptocurrency ten years from now which will far exceed today’s scale—just like how the scale of cryptocurrency ten years ago far exceeded the scale when Bitcoin was just born in 2008.

This is why I think it’s important to believe in the power of exponential growth and view what’s happening from a more macro perspective, rather than limiting it to the appearance of any specific moment.

Bitcoin is still a form of intergenerational wealth, which is one of the reasons I believe in Bitcoin

Furthermore, I continue to support crypto and Bitcoin today because of the entry of institutions and governments; very few institutions truly hold cryptocurrency. We manage vast assets, primarily from institutional partners who gain crypto exposure through us, but this accounts for less than 1% of their portfolios. Acceptance of cryptocurrency within institutions and the asset management sector is still in its early stages—Morgan Stanley only recently started allowing digital assets to be recommended to high-net-worth clients. Vanguard Group only approved a Bitcoin ETF recently.

Another thing to understand is that cryptocurrency is largely intergenerational. Remember the FIT21 Act? This is essentially the predecessor of the “Clarity Act,” which has already passed the House. If you look back to when Trump was elected for a second term, observe the U.S. Congress, you’ll find that the biggest predictive factor for voting in favor of this bill is age.

The older generation doesn’t know what cryptocurrency is; they’ve only heard about it in the news. Their children, however, are the ones using cryptocurrency, creating a generational legacy. The baby boomer generation is gradually aging, and they will pass BTC to the next generation.

When I was in college, the concept of Bitcoin was still quite novel. Now, those entering college today don’t remember the time before Bitcoin existed; it has already been 18 years since Bitcoin's birth.

Changing people's initial perceptions of things is very difficult, especially if they refuse to try themselves. You can clearly see in the U.S. Congress that these representatives do not understand what cryptocurrencies truly are. They have heard about it, read related reports, and their children have told them some situations. This is the extent of the exposure that crypto has in Congress.

The total amount of gold may increase in the future, but Bitcoin will always be independent and irreplaceable

When talking about Bitcoin and gold, people truly have a deep attachment to gold. “Gold, it has thousands of years of history; you can never replace it; it has so much Lindy effect,” thinking of my mom and grandmother, their love for gold remains unchanged. But for young people, they believe that valuable things have already been digitalized; why would a stone meticulously mined from somewhere far away on Earth be considered more valuable than something digital?

Speaking of mining, for example: SpaceX has clearly stated that one of their ways to profit is through mining rare minerals on asteroids. After the IPO, the timeline for asteroid mining has become closer; if you could obtain an asteroid containing gold, the gold supply on Earth could potentially double. There isn’t that much gold in the world; all the gold in the world wouldn’t even fill a cubic space smaller than a soccer field. If gold could indeed be discovered on an asteroid, it would completely change the landscape of the global gold market, and that impact would be permanent.

But you won’t find Bitcoin on an asteroid; Bitcoin is software. I believe that for a software civilization, our currency should also be based on software; that makes sense.

Personally, I do have made some investments at different times, but the majority of my assets are self-held. Sometimes, for tax or other reasons, I need to sell some assets to cash out, but most of the time, my personal financial situation is quite simple. I have invested a lot into all our funds as a general partner; I must contribute my own money to all our future funds. Then I also hold some cryptocurrency and ETFs, and that's about it.

For me personally, while I hold Bitcoin, I don't invest in Bitcoin because it’s not a risk asset. I believe the core of Bitcoin lies in decentralization. It relies entirely on consensus, and this consensus is not a consensus in the PoW sense but rather a social consensus that Bitcoin will become our future way of measuring non-sovereign wealth, which may be inevitable.

Due to Bitcoin's different performance, people complain bitterly about its drops, but the reality is that Bitcoin and cryptocurrencies are often extremely volatile; it will change its form, associating with different assets at different periods : sometimes it is associated with gold, sometimes with the Nasdaq, and at times it has no correlation with any asset. It simply runs in its own way, switching between these different states.

If you review Bitcoin’s history, you’ll clearly see that its performance is not always the same. Therefore, there are two competing views:

One perspective argues that its performance should mimic gold; when gold rises, Bitcoin should rise too;

The other view is that Bitcoin is an asset uncorrelated with any asset.

If Bitcoin performs like gold, why buy Bitcoin? Why not just hold gold directly?

The reality is that if you merely compare Bitcoin with gold or the Nasdaq, you may find their charts are very close. Before 2011, their correlation was very high. After 2011, that correlation diminished, and looking back through history, you'll find Bitcoin's performance method differs from any other asset. During certain periods, its performance resembles other assets, but in most cases, it clearly stands out. Bitcoin is an independent asset with its own cycles and rhythms.

I believe that over the next decade, people may continually debate and complain, asking: “Why hasn't Bitcoin risen that much?” This situation won't stop until Bitcoin's adoption curve truly reaches saturation, and that will take a long time.

I know many people who entered the crypto space at the same time as I did, but they did not make money. When Bitcoin and cryptocurrencies are at a low, how could you enter this industry and still not make money? The answer is simple; you just didn't stay in the market. As long as you stick around, you'll make money.

In a sense, this is also one of the advantages of venture capital—it forces you to hold on, to keep your position; you can’t sell your venture investments. For many of our partners, even if they think “crypto is really garbage,” they still have to hold, and the only thing preventing them from making mistakes is the fact that they are locked up.

The beauty of venture capital is that it can overcome many of humanity's worst instincts. In this market, one significant advantage you gain is that you will never be forced to sell. I think that's why, rather than directly investing in cryptocurrencies, venture capital is such a direct and straightforward way for investors to access crypto.

I remain optimistic about ETH and SOL; the market is pricing them with a “growth narrative”

Many people have lost confidence in ETH and SOL; they say on social media that it’s just a meme with no cash flow—why assign value to these things?

This is precisely what I want to counter; their view is that these assets are valuable because fools are continuously buying in, maybe some retail investors, maybe Tom Lee, buying tokens without truly thinking about it. But the market conveys a deeper wisdom to you: the market indeed believes these things are valuable and also believes their value will greatly exceed their current level.

They don’t generate much cash flow; so far, these protocols haven’t brought in much revenue; why would the market assess the value of an asset that doesn’t generate cash flow? But look at OpenAI; OpenAI burns money—compared to all they pay, their revenue is minuscule, yet their valuation reaches hundreds of billions. Of course, this point alone doesn’t prove the value of cryptocurrency.

The market operates in two states: one is cash flow oriented (show me actual profits), and the other is growth oriented (I don't care about current cash flow; I only look at future growth potential). I think this distinguishes Silicon Valley thinking from Wall Street thinking; both switch between these two models. Like Tesla, although its P/E ratio is absurdly high, the market gives it a high valuation because it believes in the huge growth narrative around its self-driving fleet and Optimus robot, not its current cash flow.

Ethereum is currently viewed by the market as a growth asset; it barely reacts to cash flow indicators like increased transaction fees or burn rates, but is highly sensitive to the narrative that “future scale will far exceed today’s.” If this growth narrative is shattered, Ethereum will suffer tremendously.

The growth narrative can go wrong too; look at Peloton, Roblox, the metaverse, WeWork, and early green energy ventures. But the uniqueness of cryptocurrency lies in the fact that it has gone through multiple boom-bust cycles and has managed to rebound each time. This is incredibly rare among other assets, indicating that deeper, more resilient changes are occurring behind it.

This strong speculative quality reminds me of the internet bubble of yesteryears. The only example I can think of during the internet bubble timeframe is E-Trade, which was a platform for trading stocks online—previously, buying stocks required traditional stock brokers (calling or visiting a branch). E-Trade allowed people to trade stocks directly online, making it very convenient. What happened? Many people, through the E-Trade platform, bought massive amounts of stocks of various “.com” companies, further driving up the crazy valuations of internet stocks and fueling the expansion of the entire internet bubble.

The market is pricing them on the basis of the “growth narrative,” and this pricing logic has historical precedents, but it still requires cautious optimism.

Hyperliquid combines growth narrative and cash flow

Hyperliquid is so successful because it possesses both; such assets are rare, boasting decent cash flow along with a growth narrative. Its market share is rapidly expanding, and it has also broadened the on-chain contract market. Additionally, leveraging HIP 3, it has extended into other verticals like stocks, precious metals, oil, indices, and other derivatives.

Currently, just the RWA (XYZ) trading alone has seen Hyperliquid's market size exceed that of the sixth and seventh largest perpetual bond markets themselves. Of course, they are also buying back and burning HYPE; their massive cash flow coupled with growth potential makes HYPE/Hyperliquid such an explosive asset, though this situation is very rare.

In an AI capital-absorbing era, if you can't bring value to cryptocurrency, perhaps it's time to leave

AI is undoubtedly the most important technology of the 21st century, the flow of talent and capital towards AI is correct; it’s a normal reallocation of capital and talent, part of capitalism.

The cryptocurrency industry has moved past its early “wild west” phase. It is now transitioning from “wild west” to the “building and expansion” phase. This is normal and healthy. The earliest pioneers—those attracted by extremely high risks and unknown possibilities—if they now feel this is no longer suitable for them, I completely understand, they can choose to leave.

Just like social media back in those days: by around 2010, the major innovative ideas (like Facebook, LinkedIn, etc.) had essentially all been born, and what remained was large-scale execution and expansion. Although there weren't as many wildly creative innovations, the industry still achieved explosive growth, giving rise to some of the world's most powerful companies.

Today’s cryptocurrency is the same. We’ve clarified the direction and potential of this technology; what’s next is to build solidly, execute, and scale. If you're someone who needs to constantly seek out “wild west” scenarios, thriving on extreme uncertainty and wild opportunities, this may no longer be the best place for you—perhaps fields like AI, which are still in early exploration, will be more appealing.

But for me, this doesn’t indicate the end of the industry; instead, it proves that we are headed in the right direction. Early participants who stick with it are now reaping the sense of accomplishment and returns leading this industry towards maturity. The industry continues to evolve; it’s just that the gameplay has changed.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。