Author: Nathan Montone; Source: M31 Capital ‘Compiled by: BitpushNews

Historians tend to view America's "Gilded Age" as a story of robber barons and peasant protest. However, investors should see more practical value in it: it is the clearest and best-researched example we have of what happens when a country's productivity base transcends the monetary system that prices it.

If you strip away the personal feuds and political drama of the years 1873 to 1896, what remains is a sophisticated four-part machine with predictable behavior and a clear endpoint.

Now, the machine is roaring into action again. It is repeating itself in mirror-mirror fashion - with monetary policy going in the exact opposite direction - and the machine's operating cycle has been dramatically compressed, fueled by every increase in capital mobility since the invention of the telegraph.

In the first cycle, productivity manifested itself in the railroad, steel, and electrification industries, which expanded at a pace that the gold standard dollar refused to cooperate with. Prices have been falling for two decades. Anyone holding debt is completely crushed; anyone holding such a fragile currency can be handsomely rewarded for doing nothing. The protest movement that followed (Silver, Bryan, and the famous "Cross of Gold" speech) lost the election it inspired, but ended up winning the long debate because the underlying systemic mismatch had to be addressed somehow. Seventeen years after Bryan's defeat, the country witnessed the birth of a central bank: the Federal Reserve.

Today, the core of this wave of productivity is computing power. The capital expenditure (Capex) numbers flowing out of hyperscalers and sovereign AI projects are anything but ordinary; this is infrastructure construction on a scale that rivals that of the U.S. rail network. And the currency that prices this productivity behaves in exactly the opposite way as gold did in 1879. Instead of refusing to expand, the dollar is now being forced to expand faster than its institutional credit can sustain, in order to support a debt stack that can no longer accommodate real interest rates.

The process of wealth deprivation is also evolving in the opposite direction: deflation was ruthlessly crushing borrowers back then, but now it is suppressed real yields that are ruthlessly harvesting savers. The channel of protest has moved from the ballot box to the balance sheet. Sovereign institutions and organizations in various countries are quietly rotating towards Bitcoin and gold, without even needing to make any political speeches.

This article will dismantle this four-part machine, identify three reasons why the analogy does not work, and issue three predictions with clear conditions - if the conditions are not met, I will admit that the prediction failed.

“Every monetary regime follows the same trajectory: a slow betrayal of savers, a populist burst, a reset.”

Symbol flipping

The key to understanding this historical analogy is that the two patterns of monetary failure are exactly the opposites of each other. In the first cycle, the dollar was too rigid; in the current cycle, the dollar is too elastic. However, for those who hold the dominant currency, the consequences in both directions are exactly the same: Purchasing power is quietly flowing in a constant and almost imperceptible way to the holders of assets that the current system cannot price honestly.

In 1885 these assets were land and productive enterprises to which cash holders lost. In 2026, these assets are a scarce store of value at the sovereign level and a claim (equity) to AI construction; cash holders are also losing to them, but the path was deflation back then, and now it is inflation.

1. Productivity prosperity

1873: The core engines were railroads, electrification, and the telegraph. Production capacity is expanding far faster than the monetary base can absorb.

2026: The core engines are computing power, AI infrastructure and blockchain settlement, and the sovereign powers of various countries are competing to become the host of these constructions. The roughly $700 billion in AI capital spending announced in the first quarter of this year is a sovereign-level injection of productivity. These infrastructures will outlive the regimes that funded them, just like the railroads did. That's exactly what's happening in today's data centers.

2. Fragile monetary system

1873: This fragile system manifests itself in the gold standard that maintains prewar parity, a fixed nominal anchor that cannot adjust as productivity develops.

2026: It manifests itself as a fiat dollar reserve system at the end of the cycle, under extreme fiscal expansion: federal debt exceeds 125% of GDP, term premiums continue to rise, and the Fed is almost unable to implement substantial tightening without destroying the fiscal arithmetic. Today's fragility is reversed (in the form of over-easing rather than over-tightening), but the consequences are exactly the same: the system can no longer reasonably price its nominally measured productivity.

3. Savers are deprived of their wealth

1873: The working mechanism is deflation: Nominal wages are compressed, real debt burdens increase, and rural borrowers are completely crushed.

2026: The operating mechanism is real interest rate suppression: nominal yields are below real inflation, term premiums are squeezed by official sector demand, and the currency continues to depreciate relative to productivity-anchored alternatives. Although the sign of the mechanism has flipped, the result is the same: purchasing power is slowly being transferred from the holders of fragile currencies to the holders of more hard-core assets. Now deprived of wealth are all those who save in dollars, and any country that holds a currency it cannot issue.

4. Populism breaks out

1873: Bryan's Free Silver Movement was agricultural, Native American, and organized through political conventions. It lost the 1896 election and subsequently dissipated as an electoral force.

2026: Today’s outbreak is digital, global, and operating outside electoral channels: manifesting itself in sovereign defections to Bitcoin and gold, structural ETF buying, and a generational asset rotation that simply does not require a “Cross of Gold” speech to mobilize. Pay more attention to capital flows and less to political news.

Why the protests seemed peaceful

Bryan's movement gained momentum because those who lost money had no choice. A farmer in Kansas in 1894 couldn't open a Robinhood account and switch to Bitcoin; the only leverage available to him was political leverage, and he pulled it as hard as he could.

Today's counterpart has an exit channel. The central bank governor of a non-aligned country can add Bitcoin to the reserve portfolio through a board memorandum. A pension allocator can adjust duration without writing a column. The pressure that produced Bryan remains; it simply flows through the balance sheet, where it leaves no rhetorical trace.

If you are looking for the Golden Cross speech of 2026, you will find it on the sovereign balance sheet under the symbol "BTC".

Where the analogy fails

2026 is not a replica of 1873. Historical analogy is only a tool for thinking, and like all such tools it breaks down at the edges. There are three failure points that are worth pointing out because they reshape the path forward. In our vision, these failure points all point in the same direction—to make current predictions sharper, not softer.

Cycles are no longer limited to a single country

The first version of this machine ran inside American politics from start to finish. Congress passed the laws that triggered the cycle; American voters responded to it through elections; Congress ultimately passed laws to address the problem. The entire arc, from the Coin Act of 1873 to the establishment of the Federal Reserve, is domestic. The current version is completely different.

The dollar’s reserve role is controlled more by foreign central banks than anyone in Washington. The asset rotation that has unfolded is driven by allocation choices made by Beijing, Riyadh, Brasilia and a dozen other capitals that politically owe the United States nothing. There is no "Bryan" to be defeated, and no Federal Reserve Act to wait. The ultimate solution will not be one piece of legislation, but rather a slow, distributed evolution of who holds what assets.

The time period has been greatly compressed

In the last cycle, a full forty years passed from inception to institutional resolution. This number reflects a world in which capital moved by ship and information was transmitted by wire. In 1880, a sovereign wanting to reallocate reserve assets had to physically transport gold; a farmer wanting to express a preference between different monetary regimes had to wait for the next election. Now, the friction in both places has returned to zero.

ETF flows can be cleared overnight. The reserve manager can complete the portfolio rotation before lunch. I expect the span of this structural cycle to shorten by about an order of magnitude: from 40 years to about 4 years. For anyone relying on a 19th- or even 20th-century timeline, the implication is troubling: The window between awareness of the cycle and missed opportunities by acting too late has collapsed.

The current reset of assets has no historical precedent

The most interesting "non-analogy" is actually the simplest. In the 1890s, silver was the asset that the protest movement was trying to monetize—a metal that had existed for centuries as part of bimetallism, was produced in mines owned by centralized interests in the country, and could be stripped of currency status with just an act of Congress (and it was).

Silver was politically manipulated and captured in 1896, and Bitcoin will never be treated the same way. Seventeen years after Bitcoin’s creation, it has no parity to defend, and governments can’t sign anything to remove it from the currency conversation. This fundamentally changes the politics of adoption. Adoption will therefore not come as a black-and-white policy reversal, but rather as a continuous accumulation curve, with ETF flows and sovereign holdings being the core explicit variables.

“Today’s cycle has been multipolar from the beginning. There is no Brian, no Cleveland, just a global financial ecosystem.”

Future Forecast

If this analogy holds true, it should be able to produce predictions that can be falsified. I record below three predictions that anchor three turning points in the original sequence: the protests of 1896, the time elapsed between protest and the settlement, and the institutional reconstruction of 1913. Each prediction comes with the probabilities I give today, and clear conditions under which I would invalidate them. These forecasts will be entered into our standing books and re-evaluated quarterly.

1. The Next Two Years: A Modern Version of 1873-1896

The populist outbursts of the 19th century were recorded at the electoral level. I expect that the outbreak of the 21st century will be recorded in the sovereign reserve layer. By the end of 2027, in addition to the United States, at least one G20 sovereign will officially declare Bitcoin as a strategic reserve asset.

Probability: 70%

Expiration conditions: No new G20 sovereign Bitcoin holders are added by the end of 2028.

2. The Next Three Years: A Modern Version of 1897-1912

The original cycle lasted 40 years from demonetization to passage of the Federal Reserve Act. In a day when capital flows are measured in milliseconds, I expect cycles to be an order of magnitude shorter. By the end of 2029, three or more additional G20 sovereigns will hold publicly stated strategic Bitcoin reserves, and the U.S. dollar’s ​​share of global central bank reserves begins to show a measurable decline below current levels.

Probability: 60%

Expiration Condition: For more than four consecutive years after the announcement of the first new sovereign, Bitcoin adoption in the G20 has stalled below 5 holders.

3. The Next Five Years: A Modern Version of 1913

After Bryan's defeat, structural pressures went underground and resurfaced in the Federal Reserve Act of 1913. I expect the modern analogy will be resolved by institutional acceptance (compromise) rather than electoral-level rebellion: total sovereign holdings of Bitcoin exceeded $200 billion at current prices, and the U.S. dollar’s ​​share of global reserves fell below 50% (currently around 58%). This 50% number reflects path uncertainty, not direction uncertainty. I have a very high degree of certainty about the direction of this trend.

Probability: 50%

Expiration conditions: The share of U.S. dollar reserves remains above 50% until 2030; or the collaborative restrictions implemented by the G7 on institutional Bitcoin custody prove to be effective for a long time; or the neutral reserve instruments issued by the Bank for International Settlements (BIS)/BRICS successfully absorb the defection funds of sovereign countries.

Investment inspiration

This analogy by itself doesn't tell you directly what you should buy. What it tells you is how to think about the choices that are already faced in every macro ledger. The following three points of inspiration can be drawn directly:

Cash is the key transaction now

The core idea that needs to be internalized most is that in 2026, the "risk-free asset" will play the exact same role as the long-end bonds in the accumulation phase of the original cycle: this position will silently drain your purchasing power year after year, and this loss will not be reflected in any single statement. Any portfolio that views U.S. dollar cash as a neutral benchmark is actually making a huge, undisclosed bet that this cycle will end differently than the last. This gamble may pay off, but it is by no means free or neutral, and it should be subject to position control and regular review like any other bet.

News headlines are just a distraction

If you were to read even a cursory history of 1896, you might conclude that Bryan's failure ended the logic of silver investment. But looking over the long term, the opposite is true: His defeat simply moved the protest out of the political realm and into the more secretive and patient channels of institutional change, which is where it ultimately triumphed. The current phenomenon of correspondence is well worth holding on to. When political opposition to a Bitcoin or gold rotation reaches its highest decibels, that's usually not the peak of trading. It’s actually a signal that cheap channels of protest (tweeting, voting) are closing while quiet, expensive channels (balance sheet adoption, company building) are opening. Funding flows will become louder, while rhetorical debate will become quieter.

Speed premium

The investors most likely to misjudge this cycle are those whose intuitions were shaped by the post-1971 dollar system, which moved slowly in units of business cycles. And the 1873 cycle, after accounting for the impact of the collapse of friction in capital flows, suggested that this would be a much faster process. If I’m right—that the compression of this cycle is measured in “years” rather than “decades”—then position allocation approaches that assume patience will be belatedly entering the market after much of the asset repricing process is over. The premium will be reserved for those who brace themselves for the cycle before the curve turns.

• Hard assets: Bitcoin first, gold second. Bitcoin provides stronger explosive power (leverage) for the logic of cycle compression; while gold provides higher institutional acceptance for the logic of staying patient.

• State variable: Curve of cumulative holdings of Bitcoin by G20 sovereigns. If you can only focus on one chart in the macro ledger this year, let it be this one.

• Duration: Long-term USD fixed income is the clearest expression of trading on the rigid currency side. You definitely don’t want to be on this side.

• Stocks: Any asset anchored in the productivity wave itself (AI infrastructure, the computing supply chain, the power and cooling stack that supports it) directly captures the real economy half of the cycle.

• Rule: Near-term forecasts are the first checkpoint. If it fails, I will make corrections publicly, never covertly.

The last time a wave of productivity in the United States exceeded the carrying capacity of its currency, the result was a crisis, a political battle, a rise in populism, and a complete reconfiguration of the global monetary order.

Today, the process is running again. The mechanics are reversed and the analogy breaks down in places, but the dynamics are the same.

Dollar savers are the dispossessed class in the current cycle, just like rural debtors in the last cycle. Trading stands on the antithesis of this reality, and the window to realize this is likely to be much shorter than in the first iteration of history.

Good luck.