In a major announcement on Wednesday, Strike CEO Jack Mallers unveiled a suite of product updates and strategic moves that are reshaping the bitcoin-backed lending landscape. From a pioneering proof-of-reserves system for loan collateral to volatility-proof loans designed to protect against market swings, Mallers also revealed a $2.1 billion credit facility and expressed full support for a proposed merger involving Tether, Twenty-One Capital, and bitcoin miner Elektron Energy. Here are the five critical developments you need to know about.
1. Lending Proof-of-Reserves: On-Chain Transparency for Borrowers
Strike launched the first iteration of its lending proof-of-reserves, giving borrowers the ability to verify that their collateral is both present and segregated in a distinct on-chain address. Developed in partnership with Tether, this transparency infrastructure allows users to see exactly where their funds are held. “We want you to trust us and know that we are who we say we are,” Mallers said during the presentation. The feature is available now through Strike’s private client desk. By offering cryptographic proof that each loan’s bitcoin collateral remains untouched and ring-fenced, Strike aims to reduce the trust barrier that often deters potential borrowers.
2. “Volatility-Proof” Bitcoin-Backed Loans: No More Forced Liquidation
In a joint effort with Tether, Strike introduced what Mallers calls “volatility-proof” bitcoin-backed loans. This innovative structure removes the risk of forced liquidation when bitcoin prices drop or broader markets decline. Instead of the traditional margin-call mechanism, the system uses segregated collateral and smart contract logic to maintain solvency without triggering sell-offs. Mallers emphasized that this eliminates one of the biggest fears for bitcoin holders who want to borrow against their assets: having to sell at the worst possible time. The volatility-proof loan product is now part of Strike’s bitcoin-backed lending suite, available to customers alongside the standard loan options.
3. $2.1 Billion Credit Facility: Scaling Lending Capacity
To support the rapidly growing demand for bitcoin-backed loans, Mallers announced that Strike has secured a $2.1 billion credit facility. This massive injection of capital gives the company the capacity to meet orders of any size within its lending business. Mallers noted that Strike’s bitcoin-backed loan and line-of-credit operations have expanded significantly since launch, with users increasingly drawn to borrowing against their bitcoin rather than selling it. He described bitcoin as a “savings account” for many customers. The credit facility also underscores Strike’s ambition to become a major player in the lending space, enabling competitive pricing—rates now range from about 10.5% APR for loans under $250,000 to roughly 7.49% APR for loans over $5 million.
4. Merger Proposal with Tether, Twenty-One Capital, and Elektron Energy
Earlier Wednesday, Tether Investments published a proposal to merge Strike with Twenty-One Capital and Elektron Energy, a large-scale bitcoin miner that manages approximately 50 exahashes per second (EH/s)—about 5% of Bitcoin’s current network hashrate. The combined entity would integrate bitcoin treasury holdings, mining operations, financial services, lending, and capital markets under a single publicly listed platform. Mallers voiced strong support for the plan: “Simply put, I think it’s a great idea,” he said. Elektron founder Raphael Zagury has been proposed as president of the merged company. For Mallers, this merger represents a return to his founding vision of building a comprehensive Bitcoin company, not merely a payments app.
5. Mallers’ Vision: The Bitcoin Company Quadrant Gap
During the announcement, Mallers presented a quadrant framework to illustrate what he sees as a gap in the Bitcoin industry. He argued that the market currently lacks companies that combine high conviction in bitcoin with high operating income. Most players either have strong conviction but low revenues (like pure-play exchanges) or high revenues but weak conviction (like traditional financial firms adopting bitcoin as just another asset). By merging lending, mining, treasury management, and capital markets, Strike—through the proposed merger—aims to fill that void. Mallers’ ultimate goal is to build a vertically integrated Bitcoin powerhouse that generates sustainable income while staying deeply committed to the ecosystem. This vision aligns with the entire set of announcements, each piece helping to create a more resilient and transparent financial platform.
The announcements from Strike and Jack Mallers mark a significant evolution in bitcoin-backed financial services. With proof-of-reserves, volatility-proof loans, a massive credit facility, and a merger that could reshape the industry, the company is positioning itself at the forefront of the next wave of Bitcoin adoption. Whether these innovations will attract traditional borrowers and institutional investors remains to be seen, but they clearly address long-standing pain points in crypto lending.