newsbtc3d ago
BlockTower Capital CIO and co-founder Ari Paul laid out a starkly bifurcated view of the Bitcoin and crypto market on X late Monday, arguing the current drawdown could either mark a permanent peak in âorganic adoptionâ for todayâs crop of liquid tokens or simply a higher-timeframe correction before another speculative leg higher. Paul said heâs â50%/50% between two scenarios,â framing the split as a practical portfolio problem rather than a call for a single narrative. The post landed into an already frayed tape, and quickly drew pushback from other market commentators who viewed the 50/50 framing as evasive. Has Bitcoin Reached Its âFinal Topâ? In Paulâs bearish âAâ scenario, the core claim is saturation: crypto has now enjoyed âevery tailwind imaginableâ: ubiquitous brand recognition, even political amplification, and what he described as effectively non-existent regulatory headwinds under the current US administration, yet demand and real usage have not expanded beyond prior cycles. Related Reading: Bitcoin Bulls Hear âFedâTreasury Accordâ And Smell Yield-Curve Control He pointed to experiments that fizzled, writing that âEl Salvador kind of adopted and then abandoned bitcoin...not helpful or useful to their people,â and argued many apps and institutions âtried crypto, wasnât useful to their needs in current form.â Paul analogized the setup to the internetâs 2000-era shakeout: the idea remains world-changing, but most tokens and protocols might not survive it. He also warned liquidation risk may not be finished, noting that while âwe saw some big liquidations in the market...plenty of larger ones to go potentially, pushing things far lower.â The bullish âBâ scenario leans on macro mood and market structure. Paul argued crypto could still be a beneficiary of what he called âlate stage capitalism and financial nihilism,â with bitcoin and other assets drawing speculative flows and occasional demand for âfiat alternatives.â He added that, beyond price, builders are still shipping and usage is âquietly growingâ in niches â and that crypto remains a fertile arena for âcoordinated pumps by the rich and powerful,â implying the incentive structure for volatility hasnât vanished. âIf these two scenarios were really 50% each,â he wrote, âa moderate allocation to crypto would be sensible due to the asymmetric upside.â Blockchain Investment Group CIO Eric Weiss criticized Paulâs post as âclassic fence-sitting,â arguing it offered âzero actionable insight.â Paul shot back that constant directional certainty is âdishonest (or idiotic),â and defended probability-weighted positioning as standard practice for traders and PMs. âI shared the exact decision I made as a result of this analysis,â Paul wrote. âTraders and portfolio managers are always optimizing across probabilities...nothing novel there. And often the best decision is to be flat an asset, at least for a time.â Paul also suggested Weissâ frustration was less about the framing and more about P&L, adding he has âconsistently cautioned against the buffoonish ânumber can only go upâ theocracy that led so many to take risks and make decisions they regret.â Related Reading: Retail Dumps, Bitcoin Inflows Surge: On-Chain Data Flags Capitulation The exchange broadened when VP of Investor Relations at Nakamoto Steven Lubka argued thereâs a â60-70% probabilityâ that most of crypto outside âStablecoins and infrastructure for TradFiâ has ârun its course,â while bitcoin likely persists as a global store-of-value competitor. Paulâs reply drilled into bitcoinâs long-run equilibrium and the business models built around it. âI could see BTC âsurvivingâ in collectible form, but imo, itâs âunstableâ in current form,â he wrote. âIt needs to be bigger or smaller. If BTC price stabilizes, the security budget gradually dwindles to near zero. Itâs already comically low relative to BTC market cap today, but that ratio will worsen substantially as inflation rewards continue declining.â He then tied that dynamic to what he described as âextractionâ by intermediaries. âExchanges, brokerages, and custodians, are constantly profiting/extracting,â Paul wrote. âWithout a constant influx of new money buying, price naturally falls due to all the extraction. If BTC just stabilized here and chugged along, very few crypto businesses survive in current form. Coinbase for example would probably face a 90%+ haircut in value.â Paulâs Positioning On the tactical side, Paul said he hadnât traded crypto âat all in 6 monthsâ and ânarrowly missed selling most crypto when BTC got to $125k,â adding he had hoped for $135k as a medium-term high but found the selloff âdeeper/longer than I expected.â Now, with volatility rising, he said heâs trading more actively and is currently âplaying from the long sideâ into a bounce, with plans to âre-evaluate with BTC around $90k.â He also floated a middle-path outcome: bitcoin could trade as low as $15,000â$40,000 for a year before making new highs, potentially catalyzed by forced selling from crypto firms, including a supposed MicroStrategy-driven stress event, though he noted liquidation is not the only risk and questioned whether debt rollovers or covenants could force behavior short of a wipeout. At press time, BTC traded at $69,178. Featured image created with DALL.E, chart from TradingView.com
