Crypto & The Mathematical Cycles Of History

Authored by Mark Moss via DailyReckoning.com,

People think that progress is linear, a step-by-step process. In reality, it’s not linear. It’s actually exponential and cyclical. We have cycles that keep repeating within the overall pattern of progress. So even though things are changing, in one important sense, they’re actually staying the same.

There are also stages to the way these cycles work. They’re like a pendulum that swings back and forth. The pendulum swings from centralization to decentralization, then the process repeats.

Cycles also have time periods. That’s pretty interesting because if you’re into technical analysis, you understand everything is mathematical, which is a bit weird. And so we have these cycles within cycles. Roughly speaking, you have 28-year cycles, 84-year cycles and 250-year cycles.

Look at the math. Three times 28 equals an 84-year cycle. Three times 84 equals a 250-year cycle. So the number three is important here. Not to get too technical (pun intended!), but it’s like what you would see in technical analysis with things such as triple bottoms.

Let’s start with the 84-year cycle. You might have heard of things like the Fourth Turning, which proposes an 80-year cycle. I like to call these cycles a regime change. I say about 84 years, but it could be 74, or it could be 90 years.

But let’s just say regime change takes place about every 84 years. In the 1930s, we had regime change. What do I mean? In the United States, FDR’s New Deal essentially took America from a capitalist to more of a centralized, socialist-type country.

Roughly 84 years before that Karl Marx wrote The Communist Manifesto, which inspired the 1848 European Spring or the Springtime of the Peoples, which was the largest revolution in European history. So every 84 years we’re seeing a popular uprising, which of course we’re seeing today.

Today you have people in the streets protesting mandates. But people around the world were protesting even before the pandemic. You could see it starting back with Brexit, which was a major blow to the globalist establishment. Trump’s election in the United States was also a rejection of the establishment. We’ve also had BLM and Antifa become a force in 2020, with massive unrest in many cities.

And so you see a major swing about every 84 years (again, it could be more, it could be less). Right now, we’re at the end of an 84-year cycle, which was a centralizing cycle. But that’s only part of a larger cycle. As I said earlier, three times 84 equals 252.

And every 250 years, we have a revolution. This is where we are today. About 250 years ago we had the American and French revolutions. In the American case, they were rebelling against British rule. They set up a decentralized government afterward. In the French case they were rebelling against the Old Regime of the crown and the Church.

Two hundred fifty years before that was the Protestant Reformation. Leading up to the Protestant Reformation, the Church had amassed all the power. The Church was the only way to get to God. But once the printing press had decentralized information, the people could read the Bible themselves and discovered they didn’t need the Church after all. And the Church lost its power.

When the Church lost its monopoly, we had an explosion of development. We went into the Renaissance age.

And the Renaissance gave birth to science and technology, which then led to the Industrial Revolution. Then the Industrial Revolution, about 250 years later, brought us technology that started to centralize us again. People moved to the cities from the farms. We built giant factories. We built giant cities. Nation-states became heavily centralized.

Now we’re at the end of that 250-year timeframe. We’re entering the cycle where the pendulum is ready to swing away from centralization. We’re at peak centralization, and we’re moving toward decentralization. I don’t believe any of this is random. These cycles of history tell us that the pendulum is beginning to swing back.

The key piece to understand is that these revolutions were pushing against centralized establishments and toward decentralization. And they happen every 250 years or so on average. And if you look back through history, every 84 years, we have a revolution or a populist uprising and every 250 years we have a revolution.

Incidentally, no empires really lasted more than 250 years. Some may have technically lasted longer, but their heydays were much less. No democracy has really lasted more than 250 years either. So there’s something to the 250-year cycle.

Technology is a major component of change.  But revolutionary technology is technology that’s disruptive. Technological revolutions build entire new economies and change the way humanity works. Just like the printing press was the technological piece that changed the way the Church had monopoly power over people, today we’re witnessing another technology that’s changing things as well.

And just like the Church, no matter how many people they killed, no matter how hard they tried, they couldn’t keep the change from happening. I believe we’re in a situation today where no matter how hard establishments try, they can’t stop decentralizing technology either.

The technology that will decentralize the world is cryptocurrencies. Just like in the Protestant Reformation, we have a new technology that’s decentralizing. What’s interesting is that, at a time when the entire world is at peak centralization and is ready to move toward decentralization, we have a technology that gives us exactly what we need for decentralization.

So now we have cryptocurrencies that are breaking that centralizing grip. And so no matter how much they want to try to maintain that power like the Church did in 1500, the mega politics have shifted. The world is going from a period of centralization, and now the world is decentralizing.

The decentralized revolution is the biggest technological revolution. And technological revolutions drive all financial cycles. So a big overarching investment theme for the years ahead is in the decentralized revolution. That means Bitcoin, cryptocurrencies, etc.

If you look at Bitcoin to measure this, Bitcoin had reached a 10% adoption within a few years, by about 2019. Based on how revolutionary technologies are adopted, we should be at about 90% adoption by 2029.

Now, new technologies typically have much faster adoption because they build on top of existing technologies. So for example, the internet was adopted much faster than the telephone because it used telephone lines to gain adoption.

But decentralization is about more than cryptocurrencies. During the centralizing Industrial Revolution, if you wanted to make money, you had to be in the United States. And not just in the United States: You had to be in a city where the jobs were. And because of that centralizing nature, it made it very easy for the governments to squeeze everybody through taxes.

During the pandemic, people found out they could work from home. And so now, people are moving to places like Wyoming, Idaho and Montana where taxes are much lower.

They could never live there before because they couldn’t work there before. They can also move to Mexico or Costa Rica and work from there. I have about 15 people that work for me. Everyone’s decentralized all around the world.

So there’s going to be this great migration. That opens up plays for cash flow and real estate investing, as well as technologies that cater to them. And as people start decentralizing, the government starts losing its ability to squeeze people.

This new cycle will be well underway by the end of this decade. It could potentially be the most profitable decade of your life if you position yourself accordingly.