BTC235: Jack Mallers on XXI (21) and Strike Borrowing and Lending (Bitcoin Podcast)

Key takeaways

Jack Mallers introduces 21, a Bitcoin-focused public company aiming to leverage a large Bitcoin treasury and create innovative financial products.
The current macroeconomic landscape provides a unique opportunity for Bitcoin as it can serve as a hedge against fiat currency debasement.
New metrics like 'Bitcoin per share' and Bitcoin return rates aim to redefine financial performance, favoring long-term asset values over fiat.
Strike's approach to Bitcoin lending emphasizes transparency, over-collateralization, and a commitment to avoiding rehypothecation to protect users.
Regulatory compliance and innovation are key challenges for Bitcoin companies striving to expand their services in a fragile regulatory environment.

Summary

Introduction to Jack Mallers and 21

In this episode of the Bitcoin Fundamentals podcast, Preston Pish hosts Jack Mallers, the CEO of the Bitcoin financial services company Strike and co-founder of 21. Mallers recently announced the formation of 21, a public company intending to operate with a treasury of 42,000 Bitcoin, worth approximately $4.4 billion. The discussion revolves around the innovative strategies that Mallers aims to employ, modeled on MicroStrategy’s successful playbook.

The Macro Landscape and Bitcoin's Role

Mallers delves into macroeconomic factors influencing Bitcoin and its potential as a reserve asset during the unwinding of the global monetary order. He emphasizes the structural deficits of the U.S. economy and the pivotal role Bitcoin can play as an inelastic reserve asset. Both speakers discuss the unsustainable nature of traditional fiat currency systems and how Bitcoin offers a viable alternative.

Understanding 'Bitcoin Per Share' Metrics

A key theme discussed is the introduction of metrics like 'Bitcoin per share' and the 'Bitcoin return rate’ (BRR) that aim to measure a company's performance beyond traditional fiat metrics. This perspective encourages investors to redefine how they assess company value in the context of Bitcoin's growth potential rather than being confined to fiat currency valuations.

The Vision and Plans for 21

Mallers outlines the operational vision for 21, spanning three phases: accumulation of Bitcoin, developing a recognizable brand, and launching BTC-focused financial services. The goal is to create a unique investment vehicle that distinguishes itself from other asset classes like ETFs, while fostering a strong ethos aligned with Bitcoin's core principles.

Strike’s Approach to Borrowing and Lending

Strike is set to launch Bitcoin-backed lending services that are trauma-informed by past market failures, emphasizing absolute transparency. Mallers stresses the importance of over-collateralization and avoiding rehypothecation, intending to create a reliable lending environment where users can access loans against their Bitcoin without systemic risks.

Navigating Regulatory Challenges

Conversations shift to regulatory hurdles facing Bitcoin companies, especially in the U.S. Mallers discusses Tether's involvement and how the company plans to comply with regulations while promoting innovation. He acknowledges the challenges ahead, emphasizing the need for harmonious relationships with policymakers.

Looking Towards the Future

The episode concludes with remarks on the future of the lending landscape, including anticipated interest rate fluctuations and how financial institutions need to adapt to the growing influx of Bitcoin. The overall essence promotes the idea of utilizing Bitcoin within a conscientious financial framework, aiming for empowerment and accessibility.

Show notes

Explore the launch of Twenty One Capital, its strategic ties with Tether, SoftBank, and Cantor Fitzgerald, and how it compares to MicroStrategy or ETFs. Plus, Strike’s bold leap into secure Bitcoin lending.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro
15:29 - How Twenty One Capital was formed and why now is the right time for a Bitcoin-native public company
17:16 - What SoftBank contributes beyond funding, including possible global Bitcoin adoption strategies
19:05 - How Twenty One differentiates itself from MicroStrategy and ETFs as a Bitcoin investment vehicle
19:55 - Why “Bitcoin Per Share” is used to track performance instead of traditional fiat metrics
27:31 - The ownership structure and governance dynamics between Tether, SoftBank, and other stakeholders
28:45 - Whether and how Strike and Twenty One will collaborate, and how CEO responsibilities are managed
31:26 - How the company navigates U.S. regulatory challenges, especially with Tether’s involvement
33:07 - The roadmap for Twenty One’s operational revenue beyond holding BTC
35:02 - The thinking behind Strike’s conservative Bitcoin-backed loans and their structure
35:40 - Lessons from the collapse of other crypto lenders and how Strike avoids similar risks
42:06 - The future of interest rates, accessibility, and transparency in Strike’s lending products
49:28 - Strike’s evolving role as a Bitcoin-native financial services platform – or neobank
51:54 - How both companies aim to promote financial sovereignty while balancing ease of use
57:05 - The biggest challenges on the horizon, from regulation to competition, and how they’ll be tackled

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Jack’s X Account.

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