This question is assessing the comprehension of the reasons behind the decline of Buddhism in India during early medieval times. Option 1 refers to the assimilation of Buddha into the Hindu pantheon as an avatar of Vishnu, becoming part of Vaishnavism. This is indeed cited by historians as one of the contributing factors to the decline of Buddhism. Hence, the answer includes this point.

Option 2 suggests that central Asian invaders adopted Hinduism and persecuted Buddhists. While it`s true that these groups had an impact on the religious landscape, there isn`t strong evidence to confirm systematic persecution of Buddhists, hence option 2 is not included.

Option 3 claims Guptas were strongly opposed to Buddhism, which is incorrect. Gupta rulers, like Ashoka, were known for their tolerance and support towards many religions, including Buddhism. Hence, option 3 is also not part of the answer.

Consequently, the correct answer includes only option 1 being the most accurate.