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Noelle Acheson is the former head of research at CoinDesk and Genesis Trading. This article is excerpted from her Crypto Is Macro Now newsletter, which focuses on the overlap between the shifting crypto and macro landscapes. These opinions are hers, and nothing she writes should be taken as investment advice.

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Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

If you haven’t read “Technological Revolutions and Financial Capital” (2002) by Carlota Perez, I thoroughly recommend it. It’s a boring title for a mind-blowing book with beautiful language that is almost guaranteed to trigger a sequence of “aha!” moments, whatever industry you happen to be working in.

Her main thesis is that major technological shifts follow a pattern that takes them from creation through to obsolescence, launching “golden ages” of progress and prosperity along the rather bumpy way. She divides the sequence into five sections:

  • The Irruption Phase begins with an initial surge of interest in the new, shiny thing against a backdrop of stagnation and turmoil.
  • In the Frenzy Phase, speculation starts to dominate the headlines as financial capital takes over while use-case exploration intensifies.
  • The Turning Point tends to come as the bubble of the Frenzy Phase bursts, leading to a recession, and is usually characterized by greater involvement from regulators as well as other sectors of society.
  • The Synergy Phase kicks off the “deployment period,” which leverages the investment of the Frenzy and the infrastructure progress of the Turning Point into an expansion of economies of scale with financial capital more directly tied to production.
  • The Maturity Phase is the twilight of the curve as the limitations of the new technology start to generate friction, eventually leading to stagnation and turmoil.

Noelle Acheson is the former head of research at CoinDesk and Genesis Trading. This article is excerpted from her Crypto Is Macro Now newsletter, which focuses on the overlap between the shifting crypto and macro landscapes. These opinions are hers, and nothing she writes should be taken as investment advice.

The crypto industry is clearly at the Turning Point in the above framework. It’s not just the recent bursting of the Frenzy Phase that makes this obvious – it’s also the headlines that cross our screens every day, with their emphasis on regulatory exploration, infrastructure build and new ecosystem participants. Some could try to argue that 2018 was the Turning Point, but the technology was still too immature back then, the global acceptance still too thin and the bear market too “dry” in terms of meaningful development.

The entrance of institutional and other types of investors in 2021 and the rapid growth of high-yield crypto products triggered a level of speculation much more widespread than the initial coin offering (ICO) craze of 2017, masking significant progress on crypto deployment, which in the Turning Point is taking on a heightened protagonism.

Some of Perez’s observations about the Turning Point seem eerily prescient (all quotes from her book):

  • “The Turning Point has to do with the balance between individual and social interests within capitalism. It is the swing of the pendulum from the extreme individualism of Frenzy to giving greater attention to collective well-being.”
  • “This switch does not occur for ideological or voluntaristic reasons but as the result of the way in which the installation of a new paradigm takes place.”
  • “The Turning Point … is a crucial crossroads, usually a serious recession, involving a recomposition of the whole system, in particular of the regulatory context that enables the resumption of growth and the full fructification of the technological revolution.”
  • “The Turning Point then is a space for social rethinking and reconsidering.”

It’s important to note that Perez is not attempting to predict the future. She is condensing the experience of five previous technological revolutions going back to the 1700s (factory production, steam/railway, steel/electricity, oil/cars/mass production and telecommunication) into recognizable patterns. And yet she could just as easily be talking about the evolution of the crypto industry to date, even though it did not exist at time of publication. If the pattern she describes holds, the current stage is about to unleash a wave of adoption and acceptance that will shape a “golden age” of prosperity – such as those birthed by previous waves of tech innovation. That, in turn, could unleash not just greater efficiencies and access but also a new social structure.

It’s not hard to see a parallel to what famed macro investor Ray Dalio has been saying for some time: that we are near a fundamental paradigm shift as our societal systems become unstable, crumble and leave room for a new framework to emerge phoenix-like from the ashes.

According to Perez’s research, the Turning Point lasts anywhere between a few months to a few years, so we could have a way to go yet before the “deployment period” kicks off. But the tone and pace of recent progress suggests the transition is underway.

The Turning Point initiates a shift from “financial capital,” which prioritizes short-term gain, to “production capital” which focuses more on development. In crypto, production capital has been plugging away all along. But its prominence has recently changed. Rather than celebrations of record prices and assets under management (AUM) growth, headlines these days are more focused on technological leaps forward as much of the recent behind-the-scenes work is brought to light, setting the stage for a new phase of growth.

Ethereum’s Merge is perhaps the most high-profile example. The flurry of projects building on Bitcoin’s Lightning Network is another. There’s also progress on cross-chain interoperability, milestones reached by zero-knowledge rollup scaling technology, the launch of layer 1 blockchains, funding for new types of custody systems, known financial names launching crypto products, legacy banks and investment funds kicking the tires on blockchain-based security issuance, and much more.

Another key feature of Turning Points is the design of regulatory frameworks that have been conspicuously absent during the first two initial phases. We are certainly seeing this now, with the arduous progress of the European Union’s set of crypto rules (known as MiCA) and the response of many official U.S. agencies to President Joe Biden’s executive order mandating a comprehensive approach to digital asset regulation. There’s also the global focus on stablecoins and many local initiatives regarding crypto asset trading, as well as the recognition that international coordination would make illicit transactions easier to block.

So, why is all this important? Because it gives us reassurance that the current turmoil is merely a painful phase on the path to better times. We tend to misunderstand the meaning of the word “revolution” – taken literally, it means the coverage of a full cycle, a return to origin in order to begin anew. While the cycles outlined do not “return to origin,” they do follow a pattern that sketches out the likely evolution of the new technologies we grapple with today. In so doing, they give our current macro and crypto turmoil a refreshing perspective. Things may look bleak at the moment and many will suffer, which is never good. But the historical context colors the pervasive uncertainty with the comforting rhythm of history.

The patterns described also help us to see the significance of the recent shift in the ecosystem’s expectations. While we may lament the loss of our recent heyday with abundant profits and creative overreach, we can feel reassured that what we are going through is a necessary phase to weed out the hype and focus on real-world impact. We’ve been here before and, through the lens of history, it turned out well.

However, Perez’s book includes a description of the Turning Point that could be taken as a warning:

“It can establish institutions for increasing social cohesiveness, improving income distribution and general well-being or it can try to reinstate the ‘selfish prosperity’ of the frenzy phase, though more closely connected with real production and finding some means to expand demand,” she writes.

We seem to be on the path to the former scenario. The damage done by the collapse of the Terra stablecoin ecosystem, the Three Arrows Capital hedge fund and some crypto lenders left deep scars that, combined with intensifying regulatory scrutiny as well as self-governance, will no doubt influence risk attitudes for at least a while. Take into account the tone of crypto headlines of late with their heavy emphasis on infrastructure, governance and partnerships, and a picture emerges of an industry with strong conviction, broadening acceptance and the growing involvement of different sections of society.

The Synergy Phase with its optimistic promise may be some ways ahead still. But we are heading toward it.


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Noelle Acheson is the former head of research at CoinDesk and Genesis Trading. This article is excerpted from her Crypto Is Macro Now newsletter, which focuses on the overlap between the shifting crypto and macro landscapes. These opinions are hers, and nothing she writes should be taken as investment advice.

Noelle Acheson is the former head of research at CoinDesk and Genesis Trading. This article is excerpted from her Crypto Is Macro Now newsletter, which focuses on the overlap between the shifting crypto and macro landscapes. These opinions are hers, and nothing she writes should be taken as investment advice.