Bitcoin’s Lightning Network Is the Answer to DeFi’s Fragile Market Says Michael Saylor

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The decentralized finance (DeFi) market has never been in a bad state than now with two big protocols – Terra and Celcius – facing major crises within a month’s time. Some analysts told Bloomberg that there are some major existential issues within the DeFi space.

Mahin Gupta, founder of Liminal, a digital-asset custody platform said: “What is happening with Celsius will have serious repercussions for the industry. It’s a not-insignificant player, and its apparent failure will have ripple effects.”

The recent fragility in the DeFi space is a reminder outsized yields could be sometime too good to be true. However, Bitcoin maximalist Michael Saylor believes that Bitcoin can come to the rescue of the DeFi market. Responding to the Bloomberg article on Tuesday, Saylor wrote:

“The sound ethical, economic & technical foundation for DeFi is Bitcoin. The next generation of DeFi will be built using the #Lightning protocol and the BTC token”.

As such, the MicroStrategy CEO has been quite bullish about Lightning Network, Bitcoin’s Layer 2 scalability solution. Saylor believes that Bitcoin is the future of money and the Lightning protocol will help to scale transactions more efficiently. He said:

“If you’re going to do payments and transactions high speed, you’re going to need a base layer that’s ethically sound, economically sound, and technically sound. That’s what Bitcoin is. But then billions and billions of transactions are going to go on a layer 2 like Lightning.”

Bitcoin Could Be Cheaper Than It Looks

Jurrien Timmer, head of Global Macro at Fidelity wrote that Bitcoin could be cheaper than it looks. He adds:

If we consider a simple “P/E” metric for BTC to be the price/network ratio, then that ratio is back to 2017 and 2013 levels, even though BTC itself is only back to late 2020 levels. Valuation often is more important than price.

Just as CoinGape reported, Bitcoin’s retail accumulation has continued despite this price correction.

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Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

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