Wall Street Trader: “Bitcoin is an unprecedented financial product”

Wall Street Trader Nik Bhatia believes that Bitcoin (BTC) has become an unprecedented financial product through the Lightning Network, as it can combine the characteristics of a store of value with the characteristics of a means of payment. This fact even led Bhatia to give up his position on Wall Street as a bond trader, as he writes in a November 18 blog entry.

A store of valueittel with means of payment function

Instead, Bhatia is now an economics professor at the USC Marshall School of Business, where he deepens his fascination with Bitcoin by working as a researcher for the Bitcoin payment service provider OpenNode.

In his latest blog entry, he highlights the stark contrast between the magnitudes he has experienced in the classic financial world and the crypto industry. So he writes with regard to the year 2016, when he first became aware of crypto currencies:


“Bitcoin had a market capitalisation of less than 20 billion US dollars at the time. I, who was only a small fish in bond trading, had turned over more than 20 billion US dollars in government bonds in a few months alone”.


To equalize these orders of magnitude, Bitcoin is raised to a level similar to the 767 bio. The Lightning Network plays a crucial role in the US dollar exchange rate, according to Bhatia.

The Lightning Network is a blockchain network connected in parallel to Bitcoin’s blockchain, allowing Bitcoin transactions to be outsourced. So the transactions are handled through the Lightning Network and then recorded back in the Bitcoin block chain. This should solve the big problem of scalability, as the market-leading crypto currency would be able to handle many small transactions without being overfilled. Actual use as a means of mass payment would thus be possible. This means of payment function would follow the function as a store of value that Bitcoin already has due to its built-in scarcity. Bhatia sees something very special in this combination, which is why he finally gave up his career as a Wall Street Trader. That’s how he writes:

“The planned shortage of Bitcoin first aroused my interest, but the Lightning Network then fully convinced me […] a store of value that has the speed and scalability of a means of payment that has truly never been seen in the history of mankind and is therefore a worthwhile field.


Digital gold and means of payment

Major investor Tim Draper hit a similar horn earlier this month when he identified the Lightning Network and OpenNode as two of the key innovations that could bring the Bitcoin price to $250,000 by 2023. So he explained in this context:


“This is because the Lightning Network, OpenNode and some other payment services will allow us to use Bitcoin quickly and easily. Then it will no longer be just a store of value, but can also be used for payment transactions such as in stores or anywhere else.