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

Podcast Information:

• Title: We Study Billionaires - The Investor’s Podcast Network
• Host: The Investor's Podcast Network (Preston Pysh, Stig Brodersen, William Green, Clay Finck, Kyle Grieve)
• Episode: BTC235: Jack Mallers on XXI (21) and Strike Borrowing and Lending
• Release Date: May 21, 2025

Introduction

In episode BTC235 of "We Study Billionaires" from The Investor’s Podcast Network, host Preston Pysh sits down with Jack Mallers, a prominent figure in the Bitcoin space. The discussion delves into Mallers' ventures, XXI (21), and Strike's new borrowing and lending services, set against a backdrop of significant macroeconomic shifts and the evolving role of Bitcoin in global finance.

Macro Perspective and the Unwinding Monetary Order (00:49 – 09:13)

Jack Mallers begins by providing a comprehensive macroeconomic analysis, drawing parallels between the post-World War II era and today's financial landscape. He explains how the U.S. established the dollar as the world reserve currency by exporting its economic strength, a system now facing its "fourth turning" due to unsustainable monetary policies.

Jack Mallers [03:42]: "We're living through the unwind of the monetary order... Printing pieces of paper in exchange for real stuff doesn't make any logical sense."

Mallers highlights the structural deficits of the U.S., the trade surpluses of countries like China, and the resulting wealth gaps exacerbated by fiat currency devaluation. He underscores Bitcoin's role as a neutral, inelastic reserve asset capable of preserving value amidst currency debasement.

XXI (21) and Capital Markets Integration (09:13 – 34:38)

Mallers transitions to discuss his company, 21 (XXI), which aims to revolutionize how capital markets interact with Bitcoin. Planned to go public via a SPAC merger with Cantor Equity Partners, 21 intends to hold a significant Bitcoin reserve—42,000 BTC, valued at approximately $4.4 billion.

Jack Mallers [15:35]: "If you can tap into it because you're a public company and you can allow that liquidity to just flow straight onto your balance sheet and it’s being transmuted."

21 introduces unique Key Performance Indicators (KPIs) tailored to Bitcoin metrics: Bitcoin per Share (BPS) and Bitcoin Return Rate (BRR). Unlike traditional EPS (Earnings Per Share), BPS reflects the company's Bitcoin holdings per share, aligning shareholder interests with Bitcoin's performance.

Jack Mallers [25:30]: "We don't want the world to judge me on a manipulated fiat metric. We challenge the capital markets to measure in Bitcoin."

This approach positions 21 as a blend of blue-chip credibility and startup agility, aiming to provide a more honest valuation based on Bitcoin's intrinsic value rather than fluctuating fiat earnings.

Strike's Borrowing and Lending Platform (34:38 – 57:24)

Shifting focus to Strike, Mallers introduces the platform's new borrowing and lending services, emphasizing transparency and security to differentiate from past failures in the crypto lending space.

Key Features:

• Collateralized Loans: Users can deposit Bitcoin and receive loans up to 50% of their BTC value, ensuring over-collateralization.

  Jack Mallers [39:15]: "There's no rehypothecation, which adds to another point that should be obvious hopefully, but is worth clarifying."

• No Rehypothecation: Unlike platforms like BlockFi or Celsius, Strike strictly prohibits rehypothecation, ensuring users' Bitcoin remains isolated and secure.

• Transparent Operations: Strike plans to implement proof of reserves, allowing users to verify that their collateral is genuinely held and untouched.

• Competitive Interest Rates: By securing large pools of capital from institutional investors, Strike aims to offer single-digit APR loans, making borrowing more affordable while protecting lenders' interests.

Jack Mallers [51:13]: "We're providing a market where I'm finding pools of capital that want some return in dollar terms... This is the least risk you can take compared to real estate or a house."

Risks and Responsible Use (57:24 – 65:24)

Preston Pysh raises important considerations regarding the borrowing products' risks, particularly the contractual duration and potential market downturns. He cautions listeners about the implications of Bitcoin's volatility over the one-year loan period.

Preston Pysh [58:58]: "If you do it responsibly, you can be exactly what he just described."

Mallers acknowledges these risks, urging users to "live within your means" and responsibly manage their debt, emphasizing that while Strike provides powerful financial tools, they come with inherent responsibilities.

Jack Mallers [58:58]: "That's my advice, just as a friend to people. But yeah, that's true."

Conclusion and Future Outlook (65:24 – End)

The conversation wraps up with Mallers reiterating the importance of transparency and ethical operations in the Bitcoin lending space. He underscores Strike's commitment to providing secure, collateralized loans without rehypothecation and hints at future expansions to make these services globally accessible.

Jack Mallers [66:40]: "We're just getting started. Pretty exciting."

Preston and Mallers conclude by emphasizing the transformative potential of Bitcoin when integrated responsibly into financial systems, advocating for continued innovation and ethical practices to empower individuals globally.

Notable Quotes:

• Jack Mallers [03:42]: "We're living through the unwind of the monetary order... Printing pieces of paper in exchange for real stuff doesn't make any logical sense."
• Jack Mallers [15:35]: "If you can tap into it because you're a public company and you can allow that liquidity to just flow straight onto your balance sheet and it’s being transmuted."
• Jack Mallers [25:30]: "We don't want the world to judge me on a manipulated fiat metric. We challenge the capital markets to measure in Bitcoin."
• Jack Mallers [39:15]: "There's no rehypothecation, which adds to another point that should be obvious hopefully, but is worth clarifying."
• Preston Pysh [58:58]: "If you do it responsibly, you can be exactly what he just described."
• Jack Mallers [58:58]: "That's my advice, just as a friend to people. But yeah, that's true."
• Jack Mallers [66:40]: "We're just getting started. Pretty exciting."

Key Takeaways:

1. Macroeconomic Insights: Understanding the historical context of the U.S. dollar as the world reserve currency illuminates the current shift towards decentralized assets like Bitcoin.
2. Innovative Financial Products: XXI (21) and Strike are pioneering new models for integrating Bitcoin into capital markets and lending services, emphasizing transparency and security.
3. Bitcoin as a Reserve Asset: Bitcoin's inelastic supply and global acceptance position it as a superior store of value compared to fiat currencies.
4. Risk Management: Responsible use of borrowing against Bitcoin, coupled with over-collateralization and no rehypothecation, mitigates risks associated with crypto lending.
5. Future Potential: Continued innovation and ethical practices in the Bitcoin space can democratize access to financial tools previously reserved for large institutions.

This episode offers a deep dive into how Jack Mallers' ventures are shaping the future of Bitcoin in global finance, providing listeners with actionable insights and a vision for a more decentralized and secure financial system.