Jack Mallers, CEO of Strike, dropped a triple announcement on Wednesday: the first iteration of lending proof-of-reserves, a "volatility-proof" bitcoin-backed loan built with Tether, and a $2.1 billion credit facility. He also publicly backed Tether Investments' proposal to merge Strike with Twenty-One Capital and bitcoin miner Elektron Energy.
The Signal
Strike's bitcoin-backed lending and credit line business has been growing quietly. Mallers noted that users prefer to borrow against their bitcoin rather than sell it, treating it as a savings account. The company cut its rate tiers across the board: pricing now ranges from approximately 10.5% APR for loans under $250,000 to approximately 7.49% APR for loans above $5 million. This rate reduction, combined with the $2.1 billion credit facility, positions Strike as an aggressive player in the Bitcoin credit market, directly competing with DeFi platforms like Aave and MakerDAO, as well as traditional lenders like BlockFi (though BlockFi is no longer operational). Mallers' strategy is clear: offer competitive rates and eliminate liquidation fear to attract both retail and institutional holders.
Mallers used a quadrant framework to argue the Bitcoin industry has a gap at the intersection of high conviction and high operating income. He placed crypto exchanges like Coinbase in the high-income, low-conviction corner, and bitcoin treasury companies like MicroStrategy in the high-conviction, low-income corner. His answer: a four-pillar company spanning financial services, mining infrastructure, capital markets, and M&A. This vertically integrated vision could redefine how a company is structured in the Bitcoin ecosystem, offering a unique value proposition that combines stable operating income (lending, mining) with direct exposure to Bitcoin's price through its treasury. The proposed merger with Twenty-One Capital and Elektron Energy would accelerate this vision, creating an entity with capabilities in mining (50 EH/s), lending, and treasury management.
