Interview with Cypher Capital: How We Achieved 6x Returns in 2 Years, Outperforming Bitcoin and 99% of Global VCs During the Same Period
TechFlow Selected TechFlow Selected
Interview with Cypher Capital: How We Achieved 6x Returns in 2 Years, Outperforming Bitcoin and 99% of Global VCs During the Same Period
Web3 needs more "patient capital," aligning with the Web2 industry's approach, to support founders in building up their ventures over a longer period in the primary market.
Navigating Web3 tides with focused insightsGuest: Bill Qian, Chairman of Cypher Capital
Q: Hi Bill, can you talk about your recent investment activities?
Bill: Hello. Our fund has been quite fortunate—we heavily invested in Solana, Ton, and Sui during the bear market of this cycle, and at the application layer we backed standout projects like Peaq, Uxlink, and Bouncebit. Overall, we're currently sitting on over 6x returns, with excellent liquidity.
Q: We've heard that many VCs are struggling this cycle—what’s your take?
Bill: In the previous cycle, everyone rushed to exit post-listing—including VCs. This cycle, it's become “let the bosses run first.” Who are the "bosses"? Exchanges and founding teams. Meanwhile, VCs are being asked by exchanges and founders to embrace "long-termism," tying us down with average lock-up periods of three or four years. We’re left watching the charts as exchanges and founders cash out, while we can do nothing but wait helplessly. I often joke that being a VC this cycle isn't a profitable business—it's more like becoming a junior-tier financial consumer, making donations (grants) to the industry and contributing to its broader development. That counts as merit, too.
Q: But don’t founding teams also have vesting schedules? Aren't they also practicing "long-termism"?
Bill: You mean the vesting on the “Team Allocation” shown in pitch decks? That’s just a formality. Think of it this way: the entire token supply essentially belongs to the founding team. Every time tokens unlock from any part of the supply, it becomes a pool the team can sell off under various pretexts. The difference is, some teams use the proceeds to build their business; others use it to buy Ferraris.
Q: Few funds managed to capture both Solana/Ton and Sui this cycle—can you share the stories behind these investments?
Bill: This cycle, we directly positioned ourselves as the largest investor in Solana across the Middle East—and possibly ranked among the top three globally. When you recognize an opportunity is real, the only remaining decisions are courage and position sizing. As someone who’s lived through Web1, Web2, and now Web3 investing, my training has deeply instilled the principle of “concentrate to get rich.” Whether it’s Tencent and JD for Hillhouse, ByteDance for SIG, Tesla for Baillie Gifford in Scotland, or Apple for Warren Buffett late in his career—massive returns have always come from concentrated bets on core assets.
Q: You were an early supporter of Ton—can you tell us more?
Bill: We were the first institutional investor in Ton globally. I personally served as the first external global board member of the Ton Foundation. Our entry cost was less than a quarter of what many Silicon Valley funds later paid. My rationale for joining the Ton Foundation as a director and advisor was simple: the world’s top five social messaging platforms—only one is in China, three are in the US, and none of them can succeed in Web3. The fifth is Telegram—so we bet on it. Honestly, Western investors had doubts back then—concerns about Russian-linked projects and lingering fears from Telegram’s earlier Gram incident. But I live in Dubai and met the team regularly, witnessing their passion and vision firsthand, which gave me conviction. Also, let’s remember—crypto is inherently anti-establishment. Everyone who made big money in this space wasn’t playing by the rules. Look at USDT, Binance—they’re all anti-system success stories.
Q: Sui’s primary market fundraising was extremely competitive—dominated by firms like a16z and Sequoia US. Cypher was still quite young at the time—how did you secure allocation?
Bill: We were the first team globally to help a sovereign nation establish a strategic Bitcoin reserve. We’re the only crypto company listed in the Middle East, and globally the only listed state-owned enterprise in the crypto sector (our parent group Phoenix is majority-owned by UAE government entities). When engaging with founders, instead of positioning ourselves as “a young investment firm,” we emphasized being industrial investors from the Middle East. As a result, the founder was eager to collaborate and granted us a dedicated $5 million allocation. This made us Sui’s sole investor in the Middle East and likely the largest among global Chinese investors.
Q: Why did you go all-in on Solana and become their biggest investor in the Middle East?
Bill: After FTX collapsed, we observed that developers remained active in the Solana ecosystem. Then MEMEs took off. While the market was still uncertain about Solana, we decisively doubled down, making ourselves Solana’s largest investor in the Middle East by 2023. We’ve also brought Solana to the region—next year, Solana’s Breakpoint conference will be held in Abu Dhabi.
Q: This cycle, many people are criticizing VCs—feeling they’re neither liked nor profitable. What’s your view?
Bill: All things follow the cycle of rise, persistence, decline, and emptiness—one era flourishes, another fades. I’m not pessimistic about the VC industry at all, even though we must acknowledge that VCs from this vintage year are going through a tough phase. For the next cycle, precisely because of the current VC shakeout and the wave of innovation emerging amid technological progress and regulatory easing, conditions may actually improve for VCs. It’s like how VC firms founded in 1999—during the peak of the dot-com bubble—mostly failed, as most of their portfolio companies eventually went bankrupt. But those founded after the crash saw a reversal in performance. I remain optimistic overall because the industry needs us: to identify strong teams and directions, provide founders with vision and resources, increase project success rates, and ultimately deliver quality assets to the secondary markets.
Q: Web2 VCs are still executing multi-billion-dollar AI deals—how do you see the difference between Web2 and Web3 VCs?
Bill: They’re fundamentally different. Web2 follows the strategy of “build high walls, stockpile grain, and delay claiming kingship.” The classic playbook: raise massive capital in the private market—$1 billion, $10 billion, even more—that’s “stockpiling grain.” Expand market share aggressively, delay profitability, and build moats—that’s “building high walls.” Postpone IPOs to avoid quarterly reports and public shareholders, and delay dividends—that’s “delay claiming kingship.” The backbone enabling this entire model is private market capital—VC funding. That’s why Web2 VCs keep growing larger, managing single funds up to $100 billion, because they need to supply enough ammunition for founders engaged in corporate “nuclear wars.”
But Web3 operates differently—it’s all about “fame as early as possible.” The journey from primary to secondary markets is now too fast, leaving little room for solid product development. This quick-rich culture pushes founders to chase trends, hype marketing, and rush to exchanges. That’s why I believe Web3 actually needs more “patient capital,” borrowing some traits from Web2—capital willing to stay alongside founders longer in the private stage, allowing deeper buildup before going public.
Q: Thank you. One final question—what’s your view on the peak of this bull market? Will there be a top, or are we entering a Super Cycle?
Bill: Whenever people start talking about a “Super Cycle,” be cautious. It’s like someone telling you, “This time is different—the tree will grow to the sky.” The fundamental narrative of crypto remains growth, but the path forward will always be a spiral within cycles. Market timing is extremely difficult. We typically adjust our portfolio construction based on prevailing market sentiment—making it more aggressive or defensive accordingly. Thank you!
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
@cypher_capital
