HEATH MUCHENA: How demographics drive bitcoin’s rise

Every bull market top of the past century — from the roaring 1929 peak to the dot-com boom in 2000 — has coincided with one strange but persistent trend: a 40-year lag from a peak in birth rates. 

When a generation hits its economic prime — typically in their 40s — they buy homes, invest heavily, start businesses and become the backbone of consumption. They drive markets upward. 

This pattern held in 1929, when the market crashed 40 years after a demographic high in the late 1880s. It repeated in 1974, 1999 and again in 2018. 

If that holds true again, the next demographic market peak isn't due until 2038. That would suggest we’re in the early innings — not the twilight — of the present long-cycle bull market. 

While that might sound like financial astrology, it’s not. It’s demographics. And in markets, demographics are destiny. But try telling that to investors staring down red candles and volatile indices. 

Tensions with China are flaring again. Tariff threats are back. The US Federal Reserve appears trapped between stubborn inflation and signs of weakening employment. And consumer sentiment? Souring. 

Yet underneath the fear the structural forces driving long-term market value remain intact. Most importantly, today’s turbulence may not be a harbinger of collapse. In fact, it’s increasingly being viewed as a reversion to mean, a recalibration after the pandemic-era distortions. 

Part of the confusion stems from something less tangible: investor psychology. Today, markets are more reflexive than ever. Push-button trading has collapsed time horizons. Fear and euphoria now swing in 24-hour cycles. Retail investors can dump portfolios with a swipe. Institutional desks follow momentum models. The “long term” often lasts a week. 

So when sentiment indicators such as the AAII survey hit record bearish levels — as they did in late 2024 — it can be a signal not of danger, but opportunity. History is filled with examples where the crowd was wrong at the worst possible time. In this environment, anchoring investment decisions to data — not doomscrolling — may be the only rational course. 

Beyond equities, a bigger story is unfolding — one that ties technology, trust, and the future of money together. Bitcoin has established itself as a credible macro hedge. Institutional capital is pouring in. BlackRock and Fidelity are running bitcoin exchange traded funds. JPMorgan and Goldman are building crypto desks. Central banks are studying blockchain rails. 

What’s changed? Bitcoin is becoming digital gold. If it even comes close to matching gold’s $21-trillion market cap we’re talking $500,000 to $1m per coin. Right now bitcoin’s entire market cap is still below $2-trillion. That’s less than 10% of gold. But adoption curves — whether it’s smartphones, the internet or streaming — follow S-curves. Once the tipping point is hit, growth is exponential. 

Importantly, bitcoin isn’t alone. Ethereum is now the base layer for tokenised finance. AI-powered crypto agents are beginning to automate trades, manage portfolios and make decentralised finance usable at scale. Stablecoins already settle more volume than PayPal. 

By 2040 Gen Z will be at peak productivity. AI will be embedded into finance. Climate and defence spending will rewrite global priorities. And if crypto becomes even a modest part of this financial re-architecture, its value will rise with the tide. 

It’s easy to feel uncertain in 2025. The headlines scream crisis. Volatility is high. But volatility isn’t new. And fear is often the price of opportunity. What’s new is that we’re seeing an economic cycle that overlaps with a technological revolution and a generational demographic boom. 

That triple overlap doesn’t come often. The next chapter might look different — but history, demographics and innovation are all saying the same thing: we’re not at the end. We’re at the edge of something bigger. 

• Muchena is founder of Proudly Associated and author of ‘Artificial Intelligence Applied’ and ‘Tokenized Trillions’.