While it is rather bleak on the Bitcoin market due to the macroeconomic situation, the cryptocurrency is gaining momentum elsewhere. We are talking about the Lightning network. The capacity in the layer two network on Bitcoin (BTC) reached a new all-time high as of today (June 7). With 3,970 BTC, the liquidity in Bitcoin’s scaling solution has never been higher than today.
Converted into US dollars (USD), however, the capacity is “only” 117 million USD. As a result, dollar liquidity is 45 percent below its all-time high of USD 216 million. The reason, of course, is the rapid price loss on the Bitcoin market. After all, the No. 1 cryptocurrency is currently trading 57 percent below its all-time high of $ 69,000. Also on Tuesday, BTC has to accept a daily loss of 5.6 percent. Bitcoin is trading at $29,501 by the time of writing.
The all-time high of the Lightning network is a clear indication that the market believes the promises of the scaling solution. This is not a matter of course, as the network has existed for only four years and is technically quite complex.
Network effects provide a boost to growth
However, it should also be emphasized that the capacity of the network does not grow linearly, but exponentially – as can be seen in the graph. The background is so-called network effects, which lead to the fact that the value of the network increases with each new participant. You can find out more about this in the podcast with Alex von Frankenberg.
Recently, the interest from the institutional side had also risen sharply. For example, BTC entrepreneur Jack Mallers announced a cooperation with e-commerce giant Shopify at the Bitcoin 2022 Conference in Miami, USA. Shopify Shopify integrates Lightning payments into the point-of-sale system of Shopify customers who want to offer the service with the help of Maller’s company Strike Lightning.