Strike CEO Jack Mallers recently announced a suite of new features and strategic moves, including lending proof-of-reserves, volatility-proof bitcoin-backed loans, and a $2.1 billion credit facility. He also publicly endorsed a proposed merger between Strike, Twenty-One Capital, and Bitcoin miner Elektron Energy. Below, we break down these announcements in a question-and-answer format.
What did Jack Mallers announce regarding Strike's lending services?
Jack Mallers introduced several key updates to Strike's bitcoin-backed lending business. These include a new lending proof-of-reserves feature that allows borrowers to verify their collateral is held in a segregated on-chain address. Additionally, Mallers unveiled volatility-proof bitcoin-backed loans, designed to eliminate the risk of forced liquidation during market downturns. He also announced a $2.1 billion credit facility to meet growing demand for loans of any size. The company has adjusted its rate tiers, with APRs ranging from about 10.5% for loans under $250,000 to approximately 7.49% for loans above $5 million.
How does Strike's lending proof-of-reserves work?
Strike's lending proof-of-reserves gives borrowers the ability to verify that their bitcoin collateral is present and segregated in a distinct on-chain address. Developed in partnership with Tether, this transparency mechanism aims to build trust with users. "We want you to trust us and know that we are who we say we are," Mallers stated. The feature is currently available through Strike's private client desk. By providing on-chain verification, Strike seeks to differentiate itself in the lending space, assuring borrowers that their assets are not commingled or used for other purposes.
What are volatility-proof bitcoin-backed loans?
Volatility-proof bitcoin-backed loans are a new product developed jointly by Strike and Tether. They remove the risk of forced liquidation when bitcoin prices fall or broader markets drop. This structure provides borrowers with greater security during volatile periods. The feature is now part of Strike's bitcoin-backed lending suite, offering customers a way to access liquidity without worrying about sudden margin calls. Mallers described bitcoin as a savings account for many customers, and these loans allow them to borrow against their holdings rather than sell them.
What is the proposed merger involving Strike, Twenty-One Capital, and Elektron Energy?
Tether Investments published a proposal to merge Twenty-One Capital with Strike and Elektron Energy, a large-scale bitcoin mining operator managing about 50 EH/s (roughly 5% of the Bitcoin network hashrate). The combined entity would integrate bitcoin treasury holdings, mining, financial services, lending, and capital markets under a single listed platform. Mallers voiced his support, saying, "Simply put, I think it's a great idea." Elektron founder Raphael Zagury has been proposed as President of the combined entity under the plan.
Why does Jack Mallers support the merger plan?
Mallers supports the merger because it aligns with his founding vision for Strike: building a comprehensive Bitcoin company, not just a narrow payments app. He used a quadrant framework to argue that the Bitcoin industry has a gap at the intersection of high conviction and high operating income. The merger would create a vertically integrated platform spanning treasury management, mining, lending, and capital markets—filling that gap. Mallers believes combining Strike's financial services with Twenty-One Capital's investment expertise and Elektron's mining scale would create a powerful, diversified Bitcoin company.
What are the new interest rates for Strike's bitcoin-backed loans?
Strike 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. These rates apply to Strike's bitcoin-backed loan and line-of-credit products, which have grown since launch. Users are increasingly drawn to borrowing against their bitcoin rather than selling it, and the lower rates aim to attract more borrowers across different loan sizes.
What is Mallers' vision for a bitcoin company quadrant?
Mallers presented a quadrant framework during his announcement, plotting Bitcoin companies on axes of conviction and operating income. He identified a gap in the top-right quadrant: companies with both high conviction in Bitcoin and high operating income. His goal is to build Strike into that quadrant by combining lending, payments, and now potential mining and treasury operations through the merger. This vision underpins his support for the merger and the new product features, aiming to create a sustainable, profitable Bitcoin enterprise that doesn't rely solely on price appreciation.