On Wednesday, Strike CEO Jack Mallers unveiled a series of significant product updates and strategic initiatives, which include the introduction of lending proof-of-reserves, a novel “volatility-proof” bitcoin-backed loan structure created in collaboration with Tether, and a $2.1 billion credit facility.
Mallers expressed his support for a proposed merger of Strike with Twenty-One Capital and the bitcoin mining company Elektron Energy, as put forth by Tether Investments.
According to Mallers, Strike’s bitcoin-backed loan and line-of-credit offerings have seen substantial growth since their inception, attracting users who prefer to borrow against their bitcoin holdings instead of liquidating them.
He articulated that, for many customers, bitcoin functions as a savings account and indicated that Strike has reduced its rate tiers across the board. Current pricing now ranges from approximately 10.5% APR for loans under $250,000 to around 7.49% APR for those exceeding $5 million.
Strike has also introduced the initial version of its lending proof-of-reserves, allowing borrowers to verify that their collateral is safely stored and segregated in a distinct on-chain address.
Mallers emphasized the importance of trust, stating, “We want you to trust us and know that we are who we say we are.” The disclosure mechanism was developed in conjunction with Tether, who Mallers credited for aiding Strike in establishing this transparency framework.
The collaboration between the two companies has also led to the creation of what Mallers termed “volatility-proof” bitcoin-backed loans—a structure that mitigates the risks associated with forced liquidation during market downturns.
The segregated collateral product is currently accessible through Strike’s private client desk, while the volatility-proof loan feature is included in the bitcoin-backed lending suite available to customers.
Mallers also announced that Strike has successfully secured a $2.1 billion credit facility, which he asserted will empower the company to satisfy demand across various order sizes within its lending operations.
Merger Proposal
Earlier on the same day, Tether Investments issued a proposal advocating for the merger of Twenty-One Capital with Strike and Elektron Energy, a large-scale bitcoin mining operator managing approximately 50 EH/s, which constitutes around 5% of the current Bitcoin network hashrate.
Tether posited that the resulting entity would consolidate bitcoin treasury holdings, mining operations, financial services, lending, and capital markets under a singular publicly listed platform.
Mallers expressed his endorsement of the merger plan, stating, “Simply put, I think it’s a great idea.” He underscored his founding ambition to establish a comprehensive Bitcoin company rather than a narrow-focused payments app. It has been suggested that Elektron founder Raphael Zagury will assume the role of President for the newly combined entity.
The Bitcoin Company Quadrant and Mallers’ Vision
Mallers presented a quadrant framework during his remarks, arguing that a gap exists within the Bitcoin industry at the intersection of high conviction and high operating income.
He categorized crypto exchanges as operating in the high-income, low-conviction section, noting that they maintain profitable businesses while diversifying across numerous coins and products. Conversely, he positioned bitcoin treasury companies in the high-conviction, low-income segment, describing them as deeply committed to bitcoin but restricted in their operational scope.
He referenced Coinbase as an exchange that could enhance its bitcoin treasury holdings and praised MicroStrategy executive chairman Michael Saylor, delineating the differences between treasury strategy and product strategy. “I love him and his company,” Mallers remarked regarding Saylor, “but I want to build bitcoin products.”
In response to the identified gap, Mallers proposed a model consisting of four pillars: a financial services division encompassing brokerage, custody, lending, payments, treasury, and prime services; bitcoin infrastructure involving energy, power generation, mining, hardware, and hosting; a capital markets segment focused on loan-book securitization, mining revenue securitization, bitcoin-backed debt, and structured products; and a mergers-and-acquisitions division targeting profitable bitcoin enterprises across software, custody, payments, energy, and distribution.
The objective of the M&A division, as depicted in his presentation, is to ensure that “every dollar of operating income has one mission: buy more Bitcoin.”
Mallers concluded with the assertion that a platform of such magnitude could “change the world with its products,” echoing a phrase that has been a guiding principle throughout his career: “Fix the money, fix the world.”
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