The current frenzy surrounding bitcoin feels familiar to billionaire entrepreneur Steve Case.
Case lived the dot-com boom: He launched AOL in 1985, took it public in 1992 and merged the company with Time Warner in 2000 (the deal closed in 2001). Case delivered a 11,616% return to shareholders, according to his bio on the website of his investment company, Revolution.
And he says what’s gone on with bitcoin recently — the cryptocurrency has gone from trading at $1,000 in February to over $19,000 earlier in December (it’s currently trading a bit over $16,000), according to industry site CoinDesk — is similar to what happened when online technologies started to emerge in the 90s.
“The boom and mania around Bitcoin in recent months reminds me a little of the Dot Com boom and mania 20 years ago,” Case tells Fortune’s Term Sheet, published Wednesday.
Case doesn’t specify whether the bitcoin market as a whole will boom or bust, but says “there will be some winners and losers, and we’ll need to separate the core technologies from some of the current implementations.”
Case in point: The tech titan is optimistic about the underlying technology that supports bitcoin, a digital ledger called blockchain.
“THE BOOM AND MANIA AROUND BITCOIN IN RECENT MONTHS REMINDS ME A LITTLE OF THE DOT COM BOOM AND MANIA 20 YEARS AGO.”
“Our view is that blockchain is a core fundamental technology that will end up having a profound impact on many industries, not just the financial service industry,” Case says.
However, Case has concerns about ICOs, or initial coin offerings, a form of digital crowdfunding that uses cryptocurrency. He says they need to be regulated.
“We need to be a little more cautious around things like ICOs — some of them will work out but many of them won’t,” Case says. “It’s not surprising to me that the SEC has started to look harder at them because using some of these new technologies to raise capital in a less regulated way with fewer consumer protections is not sustainable.”
Case also believes that as the current fervor inevitably settles, good businesses will be separated from those riding the coat tails of the hype. As he learned during the dot-com bubble, often entrepreneurs are more focused on raising money than building a sustainable business — to their detriment. Instead of focusing on getting capital, focus on building your business, Case advises.
“Twenty years ago, there were many companies that went public with little in the way of revenue and generally no profits. Some of them ended up moving on to be great successes, but many fell by the wayside,” Case says.
“You have to be enthusiastic by the possibilities, but with eyes wide open about the risks. It should be about investing in great entrepreneurs building great companies and less around speculating on cryptocurrencies and certain financial instruments.”
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