Cryptocurrencies are currently going through a period vaguely reminiscent of the dot-com crash of 2000. Ari Paul, founder of the BlockTower Capital crypto fund, also says that Bitcoin has the best chance of survival.

In a bull market, it’s easy to overlook the industry’s problems, he said.

“High returns on DeFi? This is “free money”, not an indication that counterparties have defaulted recently. A persistently dormant Solana is seen as a cost of growth. Ether scaling delays and Merge issues seem trivial. Securing the Bitcoin network – we will figure this out over time,” Paul wrote.

With the emergence of the bearish trend, abstract optimism is leaving the market because people are holding billions of dollars in various coins:

“Then the questions arise: is the assessment reasonable? Is the approach fundamental in terms of indicators? Will current leaders survive in 5-10 years?

Ari Paul emphasized that in the past six months, the crypto community has gotten rid of extreme naivete, but has yet to learn to see the shortcomings of cryptocurrencies.

According to him, current bids can be a good entry for the next bullish rally, albeit a bit risky. Similar to Litecoin, EOS and Ripple after the fall in 2017, most believe alts will not survive a prolonged bear market or will emerge in the form of a zombie.

“All cryptocurrencies are still risky for me. The industry has reached an early maturity level with proven product suitability, operational infrastructure and real value. However, most of the market leaders are likely to be replaced by new, improved versions,” Paul suggested.

He proposed investing in digital currencies following the post-2000 model of investing in tech stocks – combining fundamental “value investing” in existing projects and exploring new ventures that could lead to the next bull cycle.

According to Paul, Bitcoin can be considered the only stand-alone asset in a portfolio for more than 3 years, as it competes in the “security” and “stability” categories, not technology or product.

“Even if Bitcoin fails, it’s probably not because something better will replace it. “My guess is that Bitcoin has a 50% chance of crashing in 20 years, but its chances of survival are much better than other crypto assets that offer a higher but risky return on investment.”

Finally, Ari Paul added that now is much closer to an “honest” assessment and that February 2021 is the best time ever to buy since February 2021.

“Within the two-year horizon, I am much more optimistic about crypto than I was 9 months ago, when many coins were worth 3-25 times more. But if you are trying to accumulate capital in the long run, you have to be careful with what you buy.”

According to Glassnode analysts, many indicators point to the market entering the “deepest phase of the bearish cycle”.