The founder of the investment company Blocktower compared the current bearish market trend to the financial crisis of the 2000s, and bitcoin to Amazon, which managed to survive the crisis.
Ari Paul in series of tweets compared the situation in the cryptocurrency market with the bursting dot-com bubble of the early 2000s. The businessman is convinced that cryptocurrencies are still at an early and risky stage of development. Paul noted that frequent outages in the Solana network, delays in the transition of the Ethereum network to the Proof-of-Stake consensus algorithm, and problems with scaling the Bitcoin network are not perceived as painful during a bullish trend. But when the bearish time comes, all the same factors are perceived by people in a different way, less optimistic.
“People hold junk worth billions of dollars. What is abstract optimism? Over the past six months, we have not learned anything fundamentally new about cryptocurrencies. Cryptocurrency pyramids are opening up, unprofitable business models are leaving the market… Can the current valuations be considered reasonable in light of the current fundamentals? Will the existing market leaders still be afloat in 5 years or 10 years?” asks Ari Paul.
The head of Blocktower believes that the current market drop could be a good start for the next bull run. But in the case of most altcoins, this will be too risky. Not all altcoins will be able to survive the crypto winter, and if they do, they will get out of the cycle in the form of zombies, as happened in 2017 with LTC, EOS and XRP, writes Paul. The creator of Blocktower suggested that over time, other cryptocurrencies will replace the current market leaders, but bitcoin may be an exception:
“This is the only crypto asset that does not compete with others in technology or products. First of all, thanks to security and stability. If bitcoin fails, it won’t be because something better will replace it. There is a 50% chance that Bitcoin will fail within 20 years, but it has a much better chance of winning than other crypto assets. Bitcoin reminds me of the rise of Amazon.”
Ari Paul added that despite the pressure of the bearish trend, he is much more optimistic about cryptocurrencies than he was a year ago. The businessman only calls for caution when buying crypto assets during the current downturn. In 2019, Paul stated that competing protocols would not be able to destroy bitcoin.
Source: Bits
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