CEO & Founder, Strike
Jack Mallers: Bitcoin Heading To $1 Million In This Cycle, Here's Why
Jack Mallers, CEO and Founder of Strike, discusses Bitcoin's long-term growth potential as a globally accepted currency.
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*This video was recorded on April 23, 2024
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About Jack Mallers
Jack Mallers, CEO of Strike and Twenty One Capital, has been publicly discussing the financial structure of MicroStrategy (now Strategy) and its Bitcoin holdings. In multiple interviews and conference appearances in May and June 2026, Mallers questioned the sustainability of Strategy's capital structure, which he described as having four classes of stakeholders: Bitcoin holders, debt holders, preferred shareholders, and common equity holders. He argued that the company's obligations, including a reported $2 billion annual dividend payment on preferred shares, create a "drag" that makes the true accretive net asset value (NAV) higher than commonly assumed. Mallers stated that if Bitcoin does not rise to new all-time highs "relatively soon," someone in the capital structure would have to bear the cost of meeting those obligations. He also said he does not consider Strategy's preferred shares to be equivalent to a money market fund or the risk-free rate. Mallers has also been promoting a proposed merger between Twenty One Capital, Strike, and Tether's mining arm Electron, which he described as an effort to build a "Bitcoin company" that combines operating income with a Bitcoin treasury. He outlined a four-pillar strategy for Twenty One Capital: financial services, Bitcoin infrastructure, capital markets, and M&A. On macroeconomic topics, Mallers stated that Bitcoin benefits from all scenarios—inflation, deflation, war, or peace—because it is a fixed-supply asset that cannot be changed by governments. He predicted that Bitcoin could reach $500,000, citing U.S. debt levels, potential money printing, and what he described as a coming liquidity crisis. He also criticized what he called "fear-mongering" about large institutional holders like BlackRock, arguing that Bitcoin is for everyone, including institutions.
Transcript (82 segments)
✨ AI-enhanced transcript with speaker attribution
I
Interviewer0:00
I've heard you say this on a few interviews or podcasts and on the media - a million dollars for Bitcoin. Walk us through your thesis of how it could get there.
J
Jack Mallers0:12
I just don't think that enough people have a big enough imagination of this upcoming cycle I'm expecting. I mean, the bond market is in trouble. Who owns bonds? All of our banks. So our bank deposits aren't there because the bonds that were purchased with my deposit are underwater. And so if central banks and government are going to try and save that market, the amount of liquidity that's needed is going to send assets very high.
I
Interviewer0:40
I'm very pleased to be joined by Jack Mallers today. He is the founder and CEO of Strike, a system that lets everyone use Bitcoin to make daily payments on the Lightning Network, which allows up to a million transactions per second. It's been called a revolutionary concept and product, supposed to change the way we interact with not just Bitcoin but money itself. We'll talk more about that. I've had Michael Saylor on the show - MicroStrategy CEO - last year. He was telling us about how Lightning is the future, and you can check out that clip. For example, if you wanted to move a hundred dollars right now, there's no way you should be doing that on the Bitcoin base layer. Anybody that wants to move $100, $50, buy a cup of coffee, $25, even $250 - you should be doing that with Lightning. Jack was listed on the Forbes 30 Under 30 in 2021. He's also helped make Bitcoin legal tender in El Salvador, so definitely a household name in the Bitcoin and crypto sectors. Welcome back, Jack. Great to meet you. We've met in person once, I was telling you offline, but great to reconnect online in my interview. Thank you for being here.
J
Jack Mallers1:48
David, I appreciate you having me. You gotta introduce me in my life more often, man. I gotta bring you around. That was very nice of you. I'm happy to be here. Thanks for having me.
I
Interviewer1:57
I'm happy to host you. Let's talk about Strike - you've got an upcoming announcement about an expansion plan that we need to inform the public about. But first, I want to get your views on Bitcoin and what's been going on with this rally. A lot of people are concerned that this rally is going to be short-lived, short-term euphoria. Every time we've had a high past a previous high, Bitcoin has seen a correction, and we're starting to see a little bit of that - it's pulled back to $60,000. What is your take on this rally? Is this the beginning of a new bull run, or is this just short-term hype?
J
Jack Mallers2:30
I'll answer that in two parts. I'm a long-term holder of Bitcoin, and I have the opinion that Bitcoin's been in a bull market for 15 years. The highs have always been higher and the lows have always been higher. I think more of the world is waking up to the idea that if you've got one currency that's fixed in supply and another currency that's being rapidly inflated in supply, then the one that's fixed in supply is going to appreciate in price against the one that's being inflated. So I think Bitcoin is going to go up against the dollar, and more and more people are subscribing to that thesis. It doesn't shock me that Bitcoin is the best performing asset again this year. I think the narrative we're living through right now - my favorite metric is global debt to GDP. The way I like to think about that is the amount of borrowing our governments have done from our future versus the growth they're producing to pay that back. We've borrowed a tremendous amount of time and energy from our future in the form of money with no way of paying it back, and that loss has to be realized somewhere. I think the market is waking up to the idea that the government and central banks around the world are planning to realize that loss through debasing the currency, and you're seeing that in inflation metrics all the way down to New York City. If that's the case, it's a race to own hard assets, and Bitcoin's the hardest, most advanced money we've come across in human history. So I think the recent rally, the adoption of an ETF on Wall Street - a lot of the narrative is they're going to socialize the loss of global debt to GDP and all the deficits through inflating the currency. You better not own dollars, and if you're going to own something, why not Bitcoin? I think this is the broader theme of our conversation today.
I
Interviewer4:12
At what point, Jack, do you think Bitcoin is going to start trading like its own asset and become independent of the NASDAQ, for example? As you know, it's been very well correlated with tech stocks.
J
Jack Mallers4:23
I like the Arthur Hayes quote: Bitcoin's price equals technology plus fiat liquidity. So it is a technological revolution. It's an innovation - Satoshi Nakamoto solved a computer science problem that was perceived to be insolvable before. The technology is valuable and becomes more valuable the more it gets adopted, the more it provides utility to consumers, and there are network effects and economies of scale. But then there's the fiat liquidity piece. Bitcoin seems to trend with liquidity cycles within the broader macro environment, within the central bank environment. I think it will always, at least in the nearest term, have some correlation to the liquidity available in the market. The funny part about today, David, is high interest rates in America seem to be inflationary, low interest rates seem to be inflationary - the deficits are just too big that everything's inflationary. That has resulted in Bitcoin just trending up no matter what. But I do expect it to be relatively correlated for some time.
I
Interviewer5:23
So just a broad macro question then: do you expect inflation to continue staying sticky? In other words, it's not going to come down to the Fed's 2% target anytime soon?
J
Jack Mallers5:33
Oh, no chance. As soon as SVB collapsed, I said that 2% target - you kiss that goodbye. They're going to start to socialize and normalize the idea that well, what's the difference between two and three? What's the difference between two and twenty? I think the government - it's an election year - has a decision to make: do you want bank runs or do you want inflation to run hot, because your entire banking system is insolvent? If you're going to save them and bail them out and fix this bond market, you're going to have to let inflation run hot. Neither is a good solution, but as a government you've got to pick one. Historically, governments and empires have picked inflation running hot. They're not going to - if they wanted Jamie Dimon to go to jail for running an insolvent bank... If you run Bank of America's numbers, they're technically insolvent. They could have thrown them in jail in 2008. That's not how they do it. So I expect inflation to run hot and the currency to be debased.
I
Interviewer6:26
You used the words 'hard asset' to describe Bitcoin. Can you elaborate on what you mean by that?
J
Jack Mallers6:31
Yeah, 'hard' is a simple concept. It's the hardest to produce - how hard is it to make more of it? Housing is harder than dollars because it's harder to create more housing than dollars, but Bitcoin's the hardest money of all because it's the only money that has a scarce, fixed supply. In my opinion, Bitcoin is the most advanced money ever created in human history because it's the hardest money, and money tends to trend toward the one that's hardest to make more of because it's the easiest way to persist and store value through time and space.
I
Interviewer7:05
The halving, which just happened, theoretically is supposed to have pushed up mining costs, and it did decrease the amount of Bitcoin mined per day by half. Why didn't the price react accordingly? Why didn't we see a huge spike immediately afterward, which was a couple days ago?
J
Jack Mallers7:25
You know, I've got a different take than maybe you'd read online on the halving. This is my third halving as a Bitcoin holder - I've been in the space 11 years. I think of it as an inventory reduction, like a commodity inventory reduction. I don't think it's something the market can necessarily price in or not. Think of it like there's one natural seller in the market - that's the commodity producer, the miner. They have a commodity premium, a cost to produce the asset. In order to pay down the cost they incur in producing it, they sell the finished good they produce. If that is going to be reduced by 50%, then the cushion of natural sellers is reduced by half. All that means is the cushion the market has to enter new price discovery is significantly less. If for whatever reason there's a new found demand cycle - interest rates lower, some new nation state adopts Bitcoin, whatever - you're going to enter price discovery in a lot more violent fashion. So I just consider it an inventory reduction, like the '88 drought for agricultural commodities. I think you tend to see cyclical behavior that follows the halving because there's less cushion and less padding for the market to take on new demand.
I
Interviewer8:37
What does this ultimately mean for the miners? Are we expecting the miners to be able to survive in an environment where the costs are significantly higher over time, not just because of the halving but also because they have to compete with AI companies now for the same data centers, so perhaps their fixed costs are going to go up?
J
Jack Mallers8:54
I'll separate that into two questions as well. One is Bitcoin's going to survive no matter what - the protocol adjusts to how many miners are on the network, and that's one of the innovations. The difficulty adjustment is arguably Satoshi's most clever invention. So the Bitcoin network doesn't care. The actual mining business, I think, is one of the most cutthroat, tough industries in the world. At the highest level, you are competing against every human on the planet for energy, which is the currency of the universe. I think that's an impossible industry to master. There are going to be miners that have a really difficult time, and there's likely going to be miners that are really successful. And like you said, energy is consumed not just in Bitcoin. Human flourishing has a correlation to energy - our ability to commercialize energy from the Sun is what humanity is all about. So I think it's just a cutthroat industry no matter how you slice it.
I
Interviewer9:48
We're going to continue with Jack Mallers' Bitcoin price forecast and his expansion plans for Strike. But first, a quick shout out to our sponsor, Itus Capital, an IRA that offers 35 crypto assets with the lowest trading fees in the crypto IRA space at 1%. If you're over 18 and want to open a new account with cash or roll over an existing account, click on itus.capital in the link down below or the QR code over here to get started and learn more. If you use my referral link, you get a $100 sign-up bonus once you fund your account. Okay, turning back to Bitcoin itself - I've heard you say this on a few interviews or podcasts and on the media: a million dollars for Bitcoin. Walk us through your thesis of how it could get there.
J
Jack Mallers10:34
I just don't think that enough people have a big enough imagination of this upcoming cycle I'm expecting. The bond market is in trouble, for arguably the first time in modern financial history. Bond holders are getting absolutely demolished and crushed. Now David, who owns bonds? All of our banks. So our bank deposits aren't there because the bonds that were purchased with my deposit are underwater. If central banks and government are going to try and save that market, the amount of liquidity that's needed is going to send assets very high. You can try to do napkin math, and I joke - how many COVIDs are we going to get if they try to bail out this market that we're in today? You may get two or three COVIDs. If that happens, it's impossible to speculate on an asset as scarce as Bitcoin. I think $250,000 to a million is the imagination I have in that range of just how big this can get, based on all the liquidity that's going to be required to make this market solvent.
I
Interviewer11:36
Is that based on a steepening of the adoption curve, which we'll talk about in a minute, or is it just based on normal market action - more liquidity in the natural course of time passing? What is the catalyst, basically?
J
Jack Mallers11:53
All of the above. We're talking about pricing Bitcoin in a piece of paper that's being actively debased. Maybe a more interesting question is how many houses can I get for my Bitcoins in a year? But given the fact that it is in dollars, I think that's where your imagination has to go insanely high because of the predicament the government is in. On the talk of adoption and the notion of it, I think price is the most accurate KPI we have into Bitcoin adoption. What price tells me is a rather accurate measurement of how much of the world is using Bitcoin as money. I expect more of the world to adopt Bitcoin as money, whether for any form of use case, because it's so appealing in solving so many different problems. So I expect adoption of Bitcoin as a monetary unit to go up, and against the dollar in particular and other fiat currencies, I expect it to be violent to the upside.
I
Interviewer12:47
I think the follow-up question to your view is: the Lightning Network was created to solve the problem of slower transaction speed for Bitcoin, right? But why would you, philosophically speaking, use Bitcoin as a medium of exchange at all if you believe it's going to go much higher to $250,000 or a million? Why wouldn't I just hodl it as a store of value?
J
Jack Mallers13:11
A guy like me - I'm so convicted I don't even own dollars anymore. I only own Bitcoin, so I have to spend it because it's the only money I own. But my thesis is I spend on credit cards because I get to borrow a currency that only goes down and spend without owning it, and then I own the hardest money that's the best performing asset in human history. So I'm running a short dollar trade in my everyday life. That's why I have to spend Bitcoin. But also, as a business, we have a product line that moves fiat currencies over the Lightning Network. We take a separate view and view that part of Bitcoin as a payments network. I agree with you - there are customers of ours that don't want to spend Bitcoin, but they do value faster, cheaper global payments. That's where the technology is actually disruptive in creating new value and disrupting existing businesses.
I
Interviewer14:03
I've never seen an asset that is so conflicted in its actual use case as Bitcoin. You talk to five different people and you get at least three different answers as to exactly why one should own Bitcoin. There are a lot of critics who don't necessarily agree with your view, in particular, that Bitcoin should be used as payment. Some people think it's too volatile an asset - why would I pay for something that moves up and down the way it does? It's just not useful as a currency. How would you respond to that?
J
Jack Mallers14:33
I think I'd agree. I view Bitcoin as pure humanity in the sense that it's one of the only free markets we have left, so I love the idea that people can do whatever they want with Bitcoin. If someone says they don't want to spend it because it only goes up, I'll shake your hand - good for you, you might be right. But there's the concept in Bitcoin of capital B Bitcoin and lowercase b Bitcoin. Lowercase b Bitcoin is when we're referencing the monetary unit, the actual bare asset. Capital B Bitcoin is when we're referencing the network. What I mean by that is take gold, for example, which Bitcoin is compared to all the time. What is gold's monetary network? It's us human beings. If I wanted to move gold across the world, I'd have to get off my butt, put it in my pocket, get on an airplane, and drop it off wherever I needed it to go. Bitcoin actually has a network associated with it, and that's distinct separate value. You could say that Bitcoin the unit can be competitive to the bond market or the real estate market or the dollar. Bitcoin the network can be competitive to SWIFT, Visa - it's an entirely different value proposition. So to me, we can move fiat currencies over that. Why can't I move a dollar-euro trade over the Bitcoin network instead of the SWIFT network? I don't disagree with you whatsoever. I think the technology is valued independently of your personal spending preference.
I
Interviewer15:53
Broadly, in regards to your philosophy of what Bitcoin is, you said in a January interview that you view Bitcoin as the only innovation that can solve the biggest financial problem ever, which is central banking. What did you mean by that?
J
Jack Mallers16:06
Just that there are a group of people... Listen, I think of money as time and energy in an abstracted form. It's abstracted into a market good, but that's what money is - a market good you don't buy to consume for its own sake, but you buy to exchange later. You work really hard on this podcast, David, and in return you get money. The fact that there's a central bank that can debase the value of your money means they can debase the value of your time and energy. It's a very real threat to society. I view central banking and the manipulation of currency as a central party that can manipulate society and human tendencies. I think you've been able to see that over the last 100 years since fiat currency, this latest iteration of the dollar, has been introduced. It's caused a lot of problems, so I view Bitcoin as a solution to that.
I
Interviewer17:03
Do you think Bitcoin is becoming more centralized because of the Bitcoin ETFs, which allow large institutions to buy, in theory, a majority of the Bitcoin float? Wouldn't that create a central bank for Bitcoin, so to speak?
J
Jack Mallers17:21
No. It's a common misconception, a great question. Bitcoin is not proof of stake - that might be true for something like Ethereum. Bitcoin operates with proof of work. What that means from a high level is that it doesn't matter how much you own of the actual asset itself - it gives you no further influence on the wider network. Someone who owns no Bitcoin versus someone who owns all the Bitcoin has the same opportunity and chance to mine the next Bitcoin block. They have to follow the same rules and consensus protocol on the network itself. So it doesn't matter the percentage that any entity owns. The network is distributed in ways that don't account for a person's holdings.
I
Interviewer18:04
Another argument I've heard against Bitcoin's limited supply argument - that it's capped at 21 million and therefore has value - is that you can just fork Bitcoin to infinity. What's your counterargument?
J
Jack Mallers18:19
Forking Bitcoin is creating a new asset. I like the analogy of chess. David, have you ever played chess? I'm not very good at it, but I understand the rules. Let's say you and I are playing a game of chess and you're kicking my butt. Then I fork the game and say my pawns are now allowed to move like queens, and then I checkmate you. Well, we decided to not play chess - we're playing Jack's chess, or Jack and David's chess, or the Tuesday night chess, or the chess we play when we have a bunch of beers. That's a different game. Bitcoin is defined by the consensus rules, the parameters of the system, and that's enforced by the distributed network. You can fork it and create a different asset, but you can't inflate the supply of the currency that operates within the consensus rules. You could change the rules of chess, but you're just creating a different board game. You can't inflate the rules of chess - the rules are the rules.
I
Interviewer19:14
So a hard fork on Bitcoin wouldn't change the fundamental core argument of Bitcoin having a limited supply, is what you're saying?
J
Jack Mallers19:22
Yeah. And we've already seen that. We've seen iterations like Bitcoin Cash, Bitcoin Gold, Bitcoin faster version, Bitcoin inflated version, Bitcoin smart contract version. These are just different assets that end up trading and being valued at zero. I view generally the altcoin space and all the Bitcoin forks to be arbitrages on the trend, in my opinion. I don't view them as valuable whatsoever. We've seen this play out. The main point is you can't change Bitcoin's rules - the distributed network protects against that. If you do, you create a new asset class, you don't inflate the existing one.
I
Interviewer20:03
Let's move on and talk about Bitcoin as a form of payment, which ultimately is one of the problems your company is trying to solve or enhance. Do we know why Bitcoin is not as widely used as, let's say, fiat? You've made very compelling arguments as to why it's a superior form of money in many ways.
J
Jack Mallers20:24
We see this in the growth of our own business. Our payments business is growing and doing well, but our biggest business line is customers buying and selling Bitcoin. I think the biggest use case for Bitcoin today is it stores value across time better than any other asset, and that's the killer use case that even Wall Street is subscribed to. That's what's carrying the adoption, and that's why people don't spend it - because they buy it to hold it. I also think on the payment side, we see a lot more interest and adoption, often for cross-currency payments, cross-border payments, because there's real friction there. The issue is changing consumer behavior is very challenging and difficult. The payments line grows in a slower adoption cycle than someone in Nigeria whose currency is being rapidly debased and they need something else to hold because they're basically dying and need a life raft - the central bank is sucking the time and energy out of their life.
I
Interviewer21:25
When you first got involved with Strike, when you first had this business idea, what was ultimately the problem you wanted to solve?
J
Jack Mallers21:32
When I founded the company, initially it was based on the Lightning Network's idea. I view it as an open value transfer protocol on the internet. I believe the world desperately needs a neutral value transfer protocol that can get a neutral value instrument anywhere in the world in less than a second at no cost. People often think that implies spending and using Bitcoin with all this volatility, but we can actually move a dollar, Euro, pound, or naira over that value transfer protocol. It opens up new cross-currency markets that were previously impossible because of the cost, so you can do micropayments, internet tipping, and it greatly enhances and disrupts existing ones that are very cost-prohibitive. That was the initial thing. The way the business has evolved, we've turned into one of the best in the world at Bitcoin period, especially after the fall of FTX and Sam. We are one of the most licensed, regulated, globally accessible Bitcoin financial service providers with some of the best technology. A lot of customers come to us for all Bitcoin - buying, selling, storing, sending, receiving, payments. We have developer products and APIs, so we're a one-stop Bitcoin shop at this point. But my initial thesis was that the world needed a business that focused a lot more on Bitcoin and less on speculative crypto exchange, because there's a lot more of the technology within Bitcoin that we can advance humanity with. I saw a hole in the market - a lot of crypto exchanges with leverage and not a lot of Bitcoin financial service firms that were dead focused on taking Bitcoin as far as it can go.
I
Interviewer23:14
Speaking of Bitcoin as a form of payment, Bitcoin used to be predominantly used as a form of payment before the advent of stablecoins. I've talked to several payment vendors and platforms, and they've told me it's now 80-20 stablecoin versus Bitcoin for B2B transactions, whereas a couple years ago it was the reverse. Why do you think that trend happened?
J
Jack Mallers23:39
I think Bitcoin's volatility is a user experience problem in payments. The way we solve that is by moving fiat currencies over the Bitcoin Network so you can spend a dollar using this neutral value transfer protocol. But yeah, stablecoins solve that user experience problem, so that's the primary driver. People can inflate the idea that stablecoins compete with the Lightning Network - a stablecoin is an asset, it's a euro-dollar product, it's not a network. I think they're going to eventually be complementary, but that's the primary driver.
I
Interviewer24:14
For the viewers watching who may not be familiar with the Lightning Network, let's explain how it works. One of the fundamental problems with using Bitcoin as a medium of exchange is that if I go to a store and buy my coffee with Bitcoin, it's a slow protocol to transact. Lightning fixes this problem - how?
J
Jack Mallers24:37
It takes the payments off of the blockchain. The Bitcoin blockchain has to be slow because it accounts for the reality of physics, things like the speed of light. Every single Bitcoin payment you make on the blockchain, you have to announce to the world, the world has to receive that message, validate it, incorporate it, and mine it into the blockchain. That takes time. The Lightning Network takes Bitcoin, which is a broadcast protocol where you're broadcasting to the whole world, and turns it into a link-to-link protocol where you're broadcasting just to your direct counterpart. If you're talking to one person, things become a lot faster and a lot cheaper. It's what we call a layer two, but it effectively allows Bitcoin payments to be made instantly at little to no cost.
I
Interviewer25:27
What does the end user have to do to make this happen? Does he have to download some software, use it through an app, or transact only through the Strike app?
J
Jack Mallers25:40
Hopefully nothing. There are many layers of the internet - maybe seven - but all you need to do is download a browser. We as a financial service provider build wallets that build all of this in-house so it feels and looks like a Cash App or Venmo. Of course, if you wanted to build your own internet stack at home, you can be your own ISP. Consumers can set it all up, but nowadays you just download a Bitcoin wallet, a Lightning wallet, and those that support the features work out of the box.
I
Interviewer26:14
I believe the Bitcoin layer one transaction speed is roughly seven transactions per second, whereas Lightning can operate up to a million or more in some cases. Has this caused any regulatory challenges, how much of an improvement this is over the layer one?
J
Jack Mallers26:37
No. I think this is the biggest showcase of programmable money. Bitcoin's going to get better forever because engineers are never done. It's the coolest thing in the world that we have a global money that we can work on. I think we'll continue to extend the functionality, and this is only the beginning, in my opinion. Unfortunately, we humans can't live forever to see it, but it's great.
I
Interviewer27:05
Tell us about the next steps for Strike and how your expansion could lead to the concept of hyperbitcoinization - the idea that at some point everyone in the world could use Bitcoin for something. We're not there yet, but how could Strike help us get there?
J
Jack Mallers27:23
With Europe, we're in almost 100 markets. The difference between our product and maybe a bigger exchange is, one, we focus only on Bitcoin because we think Bitcoin is the innovation and the actual only money within the crypto space. And two, we treat it as money. Our product is a wallet, and we focus on your ability to acquire or sell it, store it, and move it, as opposed to trade it. We do not consider ourselves an exchange - more so a money app. We believe more of the world is going to adopt Bitcoin as money because it is better money, it's harder money. We see that in our own growth and numbers. The future I'd love to see is that we are one of the many players that provide financial services to the new world reserve currency.
I
Interviewer28:14
How do you convince people to start using Bitcoin as a form of payment? You've mentioned El Salvador, where you were involved. This is an article from Science magazine - they've concluded that Bitcoin adoption in El Salvador has been rather weak so far. One of the issues is a lot of people don't trust Bitcoin as a form of payment yet. The study finds that Bitcoin adoption is strongest in young, educated men, banked men. Most respondents didn't know what Bitcoin even is. So even though it is legal tender there, not everyone uses it on a regular basis. What would you say to those people not using Bitcoin?
J
Jack Mallers28:59
This comes back to the idea that changing consumer behavior at that level is very challenging and difficult. But on a wider scope, I think El Salvador adopting Bitcoin has been a huge success. My favorite story is the government's treasury of Bitcoin and the fact that I don't know the Bitcoin price when the government of El Salvador can call the IMF and say, 'Hey guys, it was nice knowing you, but I'm going to end the relationship.' What I would say to the people is, if I were to walk into a corner store and no one was accepting Bitcoin yet, I would say listen, it's a new payments network that gives you access to new customers. There are no chargebacks, it's cash-final, there's no interchange. If you wanted to use a service provider like us, we cash-final settle it in any currency you want if you don't want to hold Bitcoin and be exposed to volatility. If you market it property by property, it's better than Visa - no interchange, no chargebacks, cash-final, open and interoperable with any service. You can accept a Lightning payment from Cash App, soon from Coinbase, from my customers. As a payments provider on a network, it's hands-down better. But changing consumer behavior at that level is difficult. The adoption you're seeing from Bitcoin more organically is people who are tired of getting poorer through currency debasement.
I
Interviewer30:26
Back to you - you mentioned you transact mostly in Bitcoin. How do you physically do that in your everyday life?
J
Jack Mallers30:33
I'm almost running the Michael Saylor trade personally. What I do is I only own Bitcoin and I spend on credit. That's what Saylor does - you borrow the weaker currency against the harder currency. I have credit cards, and I spend on those. When I need to pay them down, I sell Bitcoin to pay them off. I do bill pay with Bitcoin, but in that way, I'm borrowing the currency that only goes down. I get to spend without ever needing to hold it, and I hoard the currency that averages going up 50 to 100% year over year. Everything around me gets 50 to 100% cheaper year over year. It gets half off every single year. I spend on a credit line of the currency that's getting actively debased by my government, so I'm just running a short trade all the way down to the penny.
I
Interviewer31:29
What has your bank said about this?
J
Jack Mallers31:34
They haven't said anything. So far so good. I can't imagine they have. Maybe they'll watch this interview and give me a call.
I
Interviewer31:47
The broad question is, I think the banks will start using your method - they'll open up avenues for people to adopt Bitcoin, use transactions with Bitcoin, take loans using Bitcoin. At what point do you think the traditional institutions will start catching up on this trend, Jack?
J
Jack Mallers32:02
I'd be curious what they're going to do about it. If this gets adopted like a GameStop-Robinhood type situation, you're going to run the banking institutions in the US insolvent. If we all hoard Bitcoin and spend on a credit line of credit cards, then banks are going to go under. But it's very obviously the financially responsible thing to do. When my buddies ask how I could possibly do that, I look them in the eye and say, 'Why would I own something that only goes down? That's the US dollar.' If the bank is going to give me a line of credit, and I can afford to not own it, and I get to hoard the thing that only goes up... I'm a college dropout, David, but that's a very simple trade. We're hopeful at Strike to launch some products that make this a lot easier and more user-friendly. I'm really curious to see the adoption rate of it because I think it's obvious.
I
Interviewer32:58
What would incentivize merchants at local businesses to start accepting payments with Bitcoin?
J
Jack Mallers33:05
We see it and work on it. It grows slower than those who want to buy Bitcoin. But when people adopt, it's because, one, you're acquiring new customers. Merchants aren't married to the Visa or Mastercard network - they want customers to spend money at their store. Accepting Bitcoin acquires a new sector of customers. The payments network is cash-final, so chargebacks - one of the biggest costs merchants incur when selling goods and services online - are eliminated. It's cash-final, settles in real time, and cheaper because there are fewer intermediaries to broker the finality of the transaction. For all those reasons or a few of them, we see merchants pick it up more and more.
I
Interviewer33:53
Does Strike allow you to have the option to convert Bitcoin to fiat instantly at a merchant?
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Jack Mallers33:59
We allow customers to send fiat currencies over the Lightning Network and allow consumers, acquirers, or anyone to receive fiat currencies over it. For example, with our launch in Europe, our dollar-euro market - by nature of having a BTC-USD product and a BTC-EUR product, by proxy we have a USD-EUR product that is significantly cheaper than TransferWise, which the world will know as we launch. We allow cross-currency payments or payments to be acquired in local currency without ever touching Bitcoin. Everyone gets the best of both worlds - you can get the benefits of the network without touching the asset, or you can get all the asset and the network.
I
Interviewer34:41
Just to clarify, if I have Bitcoin with Strike and I go to McDonald's, I tap my phone, it takes the Bitcoin out from Strike and instantly converts to $3 for my Big Mac - how long would that process take?
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Jack Mallers34:58
Less than a second. Instantly. Let me walk through an example - I love cross-currency transfers because they have the most friction and are easiest to understand. Let's say I want to send $10 to Nigeria. What Strike is going to do is, well, how much Bitcoin is $10 worth in our system of BTC-USD? We're interconnected with the rest of the market and we're going to get an amount of Bitcoin. Then what is that amount of Bitcoin worth in naira? We're able to send that Bitcoin to any counterpart in Africa in less than a second at no cost. Bitcoin is almost like the translator in Google Translate - you take one language, put it into Google's interpreter, and it comes out as a different language. With cross-currency, you take one currency, put it into Bitcoin, and it comes out as another currency. That's how you get a dollar-naira market that's 50% cheaper than using the SWIFT network and clearing through central banks. We're just trading Bitcoin - sending dollars over Lightning is a BTC-USD buy order, and acquiring is a sell order.
I
Interviewer36:11
One of the concerns many Bitcoiners have had since the collapse of FTX and Celsius is the phrase 'not your keys, not your Bitcoin.' People advocate for using wallets for that reason. Strike is not a wallet - it's a custodial service, so people don't own their keys through Strike. How would you respond to those concerns?
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Jack Mallers36:36
We do control the keys. I would say take it off the platform, and we'll help you and encourage you to do that. I believe there's room for financial institutions in Bitcoin. Centralization provides efficiencies - there's no doubt about that. That's why AWS is the best place to run a server in the world - it's centralized with Amazon. If we had to run a distributed AWS, it wouldn't work. The idea of decentralization is very valuable when trying to elect a monetary policy for the world to agree on, but for financial services, I think centralization in some parts is okay. That's what we see in our growth and our customers. But if you're not cool with that, hit withdrawal and we'll process it.
I
Interviewer37:23
Finally, what's next for Strike besides your European expansion? Are you thinking of the entire world or limiting it to certain jurisdictions for now?
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Jack Mallers37:35
We're thinking the entire world. I can comment and say the UK is the next market, and we expect that to land within this quarter. The way I think about it is global debt to GDP is so ludicrous. The whole world's governments have borrowed so much from our future with no way to pay it back, and everyone needs Bitcoin. As a Bitcoin financial service provider, someone who holds conviction in the future of this technology saving us and providing us hope, we want to be as accessible and available to everyone on the planet in what I think is the greatest wealth transfer of all time, the great reset, and the future of money. We're just going to keep our head down and keep going.
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Interviewer38:15
If you had to guess, which markets or areas in the world would adopt Bitcoin the fastest as a form of payment - developing countries or developed G7 countries?
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Jack Mallers38:27
I think the developing world. The Western world will adopt it as a hedge against fiat debasement, like we're seeing on Wall Street - the store of value use case. Wall Street is leading the charge, and they're sending gold to new highs and Bitcoin as well. The developing world will adopt it more as a medium of exchange first.
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Interviewer38:50
I have to get your thoughts on altcoins before I let you go. It's broad, but let's start with ETH in particular. You've called it a tech play in the past. Cathie Wood recently stated her love for ETH, and she expects its market cap to reach $20 trillion by 2032. With 120 million tokens, that's $166,000 per token. She's basing this on massive adoption with DeFi applications built on ETH. Can you comment?
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Jack Mallers39:35
I think she's wrong, is the short answer. I don't think any of these altcoins are money, which is a subtle comment but means a lot. Ethereum went through a DAO hack a long time ago where the protocol was hacked for hundreds of millions of dollars, and they changed the monetary policy to protect the developers. To me, that was the first instance of a prioritization of being a technology that wants to be further adopted by developers, not a money that can act as the neutral base currency of the world. That's why I view Bitcoin as the only money that's come out of this sector and everything else as technology. The reason I call it an arbitrage on the trend is if you want to build technology, that's fine - that's what I do at Strike. I have Strike shares, that's a security, an equity. My issue is, why do you need your own currency? When I hear 'I'm saving the world - how do I get involved? Buy the currency I created' - I start to disregard your opinion. It seems like a less legally accountable way to be a central bank. It's a lot of people's excuse to create their own money and sell it to the public. That's my brutally honest take on Ethereum. That less legally accountable way is what the SEC is catching on to. I think it's an arbitrage on the trend and won't last forever.
I
Interviewer41:17
You don't think the argument that it's a deflationary asset - meaning it gets burned - isn't going to boost the value at some point?
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Jack Mallers41:26
No. It became deflationary when that's what everyone was kicking and screaming about. They switched to proof of stake when politicians were kicking and screaming about energy consumption. You know who else changes and launches features based on customer demand? Strike, Apple, Amazon, Facebook - these are companies, centralized entities, not a distributed neutral system.
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Interviewer41:47
So you wouldn't consider building Strike on any other protocol besides Bitcoin?
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Jack Mallers41:52
No, it's nonsensical. Strike's servers run on centralized servers because we care about efficiency and speed to customers. If you want to run a distributed network for some application, great, and if you want to use money, use Bitcoin. But if you run a distributed network and introduce your own currency, that's when I start having questions - what's the need for that if it's not to enrich yourself?
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Interviewer42:19
How do you define a shitcoin?
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Jack Mallers42:24
A shitcoin is a currency that was founded, distributed, and has outside influence from a central group. I view the US dollar as a shitcoin. I view Ethereum as a shitcoin. I view all the altcoins as shitcoins.
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Interviewer42:47
Is there anything that could, in your opinion, be the closest in solving the blockchain trilemma - scalability, security, decentralization?
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Jack Mallers43:00
My problem is I think Bitcoin does a great job at it. Here's a mental exercise I find interesting. In every single thing on planet Earth, with more supply you find more demand. The reason I can't store my value in iPhones - buy 10,000 iPhones today and sell them for 10x in 10 years because demand for iPhones will go up - is because with more demand for iPhones, Apple can just produce more iPhones, so the price will never go up. Bitcoin is the only asset where with more demand, you cannot find more supply. You get more shitcoins instead. When there's more demand for this asset and technology, you can't inflate the Bitcoin, so you get a bunch of shitcoins and arbitrages on the trend - people trying to inflate the revolution and innovation and sell it to the public.
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Interviewer44:29
My final question before I let you go, Jack. Great talk. What would change your mind about Bitcoin? Suppose something in our lifetimes happens such that you would give up on Bitcoin as money, as a hard asset, and move on to something else with your business. What would that hypothetical event or series of events be?
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Jack Mallers44:51
Money wants to be one, and money tends to be the hardest. If there were a harder form of money, I would adopt it along with the rest of the world logically. If there's a better money that humanity comes across, or if Bitcoin becomes a worse money, but I view both of those as zero to no chance at least within my lifetime. Bitcoin is that big of an innovation - it's going to last hundreds or thousands of years, and I'm lucky to be alive during the beginning.
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Interviewer45:30
Where can we follow you, Jack, and learn about you and Strike?
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Jack Mallers45:36
I'm all over the internet - that's where I spend all my time. I sit here on my computer and talk to guys like you. I'm Jack Mallers on Twitter and everywhere else. Strike is available in close to 100 countries. If you want to get the best out of Bitcoin, give it a try and let us know what you think.
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Interviewer45:50
We'll put the links in the description below. Make sure to give Jack a follow and Strike a follow. Thank you very much for your time, Jack. It's a great honor meeting you.
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Jack Mallers45:59
Likewise, brother. Thanks for having me.