Dragonfly Capital Managing Partner Haseeb Qureshi: The Crypto Market is Correctly "Retracing to Rational Scale"
Haseeb Qureshi, Managing Partner at Dragonfly Capital, believes that a large amount of capital incorrectly entered "should-fail" projects over the past few years, and the self-elimination of participants is precisely how "capitalism operates normally." He emphasized that the current so-called "revenue narrative" in the crypto market is overly simplified; most people are exiting not because of an overall collapse of crypto, but because they were never qualified investors or capital allocators.
He also pointed out that, in dollar terms, the total market capitalization of all companies listed on NASDAQ is still lower than that of Ethereum. The real heavyweights in the crypto market are not "revenue-generating companies," but assets like Ethereum, Bitcoin, and Solana: the high valuations of these tokens are not due to current cash flow, but because the market is pricing in a "completely different future structure" in advance.
English commentary and capital reports also show that during the 2021–2023 cycle, a large amount of risk and growth capital was injected into projects that "do not rely on revenue" but depend on "narratives and valuation expectations." Now, some of this funding has exited, leaving remaining funds more concentrated in protocols with proven demand, stable underlying chains, and a few leading platforms.
Source: Public Information
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Qureshi's statement centers on reducing the "industry bubble" to a "bulk screening of capital allocation capabilities." The bull market of 2021 was not simply an "asset revaluation," but rather a direct injection of funds that should not have appeared in the primary market into inefficient, redundant, or structurally mismatched teams through high-valuation projects. When liquidity recedes, all participants whose capital returns are long-term below opportunity costs will be systematically squeezed out; this is not an "industry collapse," but a "natural liquidation" of redundant capital.
From an asset structure perspective, he places the "crypto market" and "NASDAQ companies" on the same scale, reinforcing the dislocation between "underlying assets vs. upper equity." The traditional stock market mainly reflects profitable enterprises, while the large market capitalization in crypto is concentrated in "protocol layer and network layer assets," whose pricing logic is closer to "sovereign—currency—settlement layer" rather than "revenue—profit—free cash flow." This structural difference determines that regardless of how lively the "revenue narrative" is, top capital will still contract towards "underlying network value."
In a longer cycle, this process of "de-redundancy of capital" essentially disassembles "VC and retail speculation" from an "integrated growth engine" into "two different roles." One part of the capital needs to learn to compete within the framework of "revenue narrative, stable cash flow, and compliance," while another part continues to bet on "underlying networks, settlement, and currency." This structural differentiation will continue to change the logic of capital allocation towards protocols, projects, and infrastructure, and will reshape the "winners" landscape in the next cycle.