Bitcoin’s Bifurcated Future: Peak or Correction?

Ari Paul’s bearish ‘Scenario A’ hinges on a thesis of market saturation. He argues that crypto has benefited from “every tailwind imaginable,” including ubiquitous brand recognition and a favorable regulatory environment under the current U.S. administration, yet real-world demand and usage have failed to expand meaningfully beyond prior cycles. Paul points to El Salvador’s experimental adoption of Bitcoin, which he claims was subsequently “abandoned” and proved unhelpful, as a symbol of fizzled initiatives. He draws a parallel to the dot-com bust, suggesting that while the underlying blockchain idea is transformative, most current tokens and protocols may not survive the shakeout. Adding to the risk, Paul warns that the recent market liquidations may not be over, with “plenty of larger ones to go potentially, pushing things far lower.”

Conversely, Paul’s bullish ‘Scenario B’ rests on macro forces and enduring market mechanics. He posits that crypto could still thrive as a beneficiary of “late stage capitalism and financial nihilism,” attracting speculative flows and demand for fiat alternatives. Beyond price action, he notes that builders continue to ship products and usage is “quietly growing” in niches. Perhaps most tellingly, he identifies crypto’s persistent appeal for “coordinated pumps by the rich and powerful,” indicating the incentive structures that drive volatility remain intact. Paul concludes that if both scenarios hold equal weight, a “moderate allocation to crypto would be sensible due to the asymmetric upside” of the bullish case.

The analysis did not land in a vacuum. Eric Weiss, CIO of Blockchain Investment Group, publicly criticized Paul’s post as “classic fence-sitting” that offered “zero actionable insight.” Paul fired back, arguing that constant directional certainty in volatile markets is “dishonest (or idiotic)” and that probability-weighted positioning is standard practice for professional traders and portfolio managers. “I shared the exact decision I made as a result of this analysis,” Paul wrote, defending his approach as transparent and pragmatic, where “often the best decision is to be flat an asset, at least for a time.” He suggested Weiss’s frustration was more about portfolio performance than philosophy, and cautioned against the “buffoonish ‘number can only go up’ theocracy” that has led many to poor decisions.

The debate broadened with input from Steven Lubka of Nakamoto, who assigned a “60-70% probability” that most of crypto outside of stablecoins and TradFi infrastructure has “run its course,” with Bitcoin persisting as a global store-of-value. Paul’s reply delved into Bitcoin’s fundamental economic structure, arguing that its current form is “unstable.” He explained that if Bitcoin’s price stabilizes, its security budget—funded by block rewards—would gradually dwindle toward zero as inflation rewards decline. This, he contends, creates a critical vulnerability for the network’s long-term security.

Paul tied Bitcoin’s security budget dilemma directly to the economics of the crypto industry. He highlighted the constant “extraction” of value by intermediaries like exchanges, brokerages, and custodians. “Without a constant influx of new money buying, price naturally falls due to all the extraction,” he wrote. This dynamic presents an existential threat to crypto businesses in a stable or declining price environment. Paul offered Coinbase as a stark example, suggesting the publicly traded exchange would “probably face a 90%+ haircut in value” if Bitcoin simply stabilized at current levels, as the revenue model for many firms depends on perpetual growth and volatility.

On a personal trading level, Paul revealed he had been inactive in crypto for six months and “narrowly missed selling most” when Bitcoin approached $125,000, having hoped for a peak near $135,000. With the selloff proving “deeper/longer than I expected,” he has now become more active amid rising volatility. He is currently “playing from the long side” into a bounce, with plans to “re-evaluate with BTC around $90k.”

Beyond short-term trades, Paul floated a middle-path outcome where Bitcoin could trade in a wide range of $15,000 to $40,000 for a year before potentially making new highs. This extended consolidation could be catalyzed by forced selling from crypto-native firms. He specifically mentioned a potential “MicroStrategy-driven stress event” but also questioned whether debt rollovers or covenants could force significant selling without a total wipeout. At the time of his analysis, Bitcoin was trading at $69,178, leaving the market suspended between his two starkly defined futures.