Steep Price Declines and Long Crypto Bear Markets May be Behind us, According to an Expert

Veteran cryptocurrency investor Arthur Chong suggests that the era of severe downturns and prolonged bear markets in digital assets may be behind us.

Arthur Chong, CEO of DeFiance Capital, said the crypto market may be entering a new phase of maturity where it is starting to resemble the stock market in its behavior. He noted:

It is possible that the crypto market will evolve and we won’t see the extreme 70-80% declines every few years. Instead, we may see steady growth similar to the S&P 500 after the 2008 financial crisis.

Chong stressed that the U.S. stock market, barring a crash during a COVID pandemic in 2020, has mostly shown a gradual upward trend. The big crashes predicted by pessimists did not materialize, while returns were increasingly focused on large market cap stocks, and those with smaller market valuations remained in the background.

If this trend persists in the crypto market, Chong believes that future bull markets may not lift all altcoins as has happened in the past. Instead, only a few winners will see significant gains, similar to the way Nvidia performed in the stock market:

Most altcoins may not be good investments, but some will provide exceptional returns, as Nvidia does periodically.

Despite current market conditions, Chong is optimistic about the future of cryptocurrencies. He believes Bitcoin (BTC) and Etherium (ETH) are undervalued, especially since they are the only two cryptocurrencies free from regulatory uncertainty:

The market hasn’t fully realized that BTC and ETH are the only cryptocurrencies without regulatory issues, making them attractive to traditional finance.