Recently, a famous investor and founder of investment management company Bernstein, Inigo Fraser-Jenkins, referred to Bitcoin as a “faster horse” when compared to gold. This statement has sparked debate among investors and cryptocurrency enthusiasts. In this post, we will discuss what Inigo Fraser-Jenkins meant by his statement and examine the implications of Bitcoin’s comparison to gold.
What does the “Faster Horse” analogy mean?
The “faster horse” analogy is derived from a quote attributed to Henry Ford, the founder of Ford Motor Company. The quote states that if he had asked his customers what they wanted, they would have said faster horses instead of cars. The analogy implies that sometimes, people are not able to imagine a revolutionary product or solution, so they settle for incremental improvements.
Inigo Fraser-Jenkins used this analogy to suggest that Bitcoin is an incremental improvement on gold, which is a traditional store of value. He argued that Bitcoin is faster, cheaper, and more efficient than gold, but it does not necessarily offer any significant advantages over gold. He believes that Bitcoin’s main appeal is its novelty, but ultimately, it is just an updated version of an old concept.
Implications of the Comparison
The comparison between Bitcoin and gold has been a subject of much debate among investors. While some see Bitcoin as a new, revolutionary asset class that will eventually replace gold, others see it as a speculative asset that lacks intrinsic value.
Fraser-Jenkins’ comparison suggests that Bitcoin is not a revolutionary asset but rather an incremental improvement on gold. However, this does not mean that Bitcoin is not a viable investment option. Bitcoin has several advantages over gold, including faster transaction times, lower fees, and more secure storage options. These advantages make Bitcoin an attractive option for investors who are looking for a modern store of value.
Counterarguments to the “Faster Horse” analogy
While the “faster horse” analogy may accurately describe Bitcoin’s incremental improvements over gold, some argue that it is not a fair comparison. They argue that Bitcoin is not just an updated version of an old concept, but a new asset class with unique characteristics and potential.
For example, Bitcoin’s decentralized nature allows it to operate independently of any government or financial institution, which gives it a level of autonomy and resilience that gold does not have. Additionally, Bitcoin’s limited supply and its deflationary nature make it a hedge against inflation, which is not the case with gold.
Moreover, Bitcoin’s potential for use as a global currency for international transactions and as a store of value has led many investors and institutions to invest heavily in it. This trend suggests that Bitcoin is not just a novelty but a viable asset that has the potential to disrupt traditional financial systems.
In conclusion, Inigo Fraser-Jenkins’ comparison of Bitcoin to a “faster horse” suggests that Bitcoin is an incremental improvement on gold. While this may be true, it does not necessarily mean that Bitcoin is not a viable investment option. Bitcoin has several advantages over gold, and its status as a digital asset makes it an attractive option for investors who are looking for a modern store of value. As the cryptocurrency market continues to evolve, it will be interesting to see how Bitcoin and other digital assets continue to compare to traditional store-of-value assets like gold.