For years, capital chased margins that lived inside 1s and 0s.

Software blasted through benchmarks without hiring, without factories, without inventory. That era compressed volatility and rewarded concentration.

But what’s emerging now is something else—one where growth requires physical investment again.

Factories. Power. Transport. Materials. Labor.

That transition doesn’t happen smoothly. But, fortunately, it isn’t our first rodeo.

There are many examples where societies spent a long time mastering abstraction—finance, contracts, administration, networks—before they rebuilt the physical world to match it.

Put a different way, it’s not uncommon for complex markets to oscillate between symbols and substance, like breath.

Britain entered the Industrial Revolution after capital and trade systems reached unprecedented levels of sophistication. Meanwhile, Rome stabilized only after roads, aqueducts, and logistics caught up with imperial ideology.

Song-era China saw productivity surge once canals, ironworks, and machinery grounded its advanced bureaucracy.

The US followed the same pattern when its speculative paper empires gave way to steel, electricity, and factories in the late 19th century.

The sequence repeats:

1. Growth lives in symbols, value accrues to representations of future capacity rather than capacity itself.

2. Margins widen, volatility compresses, and risk appears manageable, giving the regime the illusion of durability.

3. Then physical limits intrude, atoms reassert themselves.

4. Growth demands the symbols adapt to the new regime.

Rinse, repeat.

Here’s what it means. (And how to play it.)

The Great Resorting

Many are worried about a collapse. But what’s happening suggests something else.

The economy isn’t lunging toward Mad Max—it’s being reshuffled.

Resortings happen when capital, labor, and resources move from one set of uses to another.

That process creates chaotic price swings, winners and losers, and short-term instability. Markets don’t like change, even when the change is healthy….

But volatility is not the same thing as collapse. (Collapse happens when those movements can’t be financed or contained.)

Pullbacks will happen. But so far they’ve been shorter and faster, absorbed by capital that’s still looking for somewhere to go.

The big risk now? Not mass contraction, but vast misallocation.

Too much capital is still parked in yesterday’s winners. Meanwhile, huge spending needs are building in energy, infrastructure, and manufacturing after decades of neglect.

That mismatch is where the danger—and the opportunity—lives.

As growth generally moves from screens to steel, returns stop coming from stories and start coming from balance sheets that can handle real investment.

The money doesn’t vanish. It moves.

So, you might be wondering… 

If atoms really are overtaking bits, what does that mean for AI and crypto? (It’s good news.)

The Strange Advantage

AI and crypto are often mistaken as substitutes for the physical economy. They’re not.

Sure, they collapse complexity fashioned by physical processes…

But they don’t necessarily replace factories, power, transport, or all forms of future labor.

Instead, their real value is in collapsing the vast coordination costs those physical systems generate as they scale.

History is pretty clear: As economies move from symbols to steel, coordination quickly becomes a big constraint.

Put it another way…

When reality thickens, coordination has to thin. Mass below, speed above.

More on what this means… and what it looks like for AI and crypto specifically… tomorrow.

First, the opportunity.