Jack Mallers: Bitcoin Heading To $1 Million In This Cycle, Here’s Why

Jack Mallers: Bitcoin Heading To $1 Million In This Cycle, Here’s Why

I’ve heard you say this on a few uh
interviews or podcasts and on of the
media a million dollars for Bitcoin walk
us through your thesis of how it could
get there 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 our bank
deposits aren’t there because the bonds
that were purchased with my deposit is
underwater and so if central banks and
government is going to try and save that
market the amount of liquidity that’s
needed is going to send assets very high
I’m very pleased to be joined by Jack
MERS today he is a founder and CEO of
strike it’s a system that lets everyone
use Bitcoin to make daily payments on
the lightning network uh which allows up
to a million transactions per second
it’s been called a revolutionary idea
concept product it’s supposed to change
the way we interact with just Bitcoin
but money itself we’ll talk more about
that uh I’ve had Michael’s sailor on the
show um micro strategy CEO last year he
was telling us about how uh lightning is
the future and you know people can check
out that clip for example if you wanted
to move a $100 right now there’s no way
you should be doing 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 so thank you for being here
David I appreciate you having me you
gotta introduce me in my life more often
man I got to bring you around that was
very nice to you I’m I’m happy to be
here thanks for having me I’m happy to
host you um let’s talk about stri you’ve
got an upcoming announcement um about an
expansion plan that we need to inform
the public about uh 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 shortlived it’s you know
short-term Euphoria every time we’ve had
a uh a high to a past 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 Run or is this just
short-term hype um I’ll answer that in
two parts uh I’m a long-term holder of
Bitcoin and I I have the opinion that
bitcoin’s been in a bull market for 15
years uh the highs have always been
higher and the lows have always been
higher and 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
then you’ve got 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 and so I think
Bitcoin is is going to go up against the
dollar and more and more people are
subscribing to that thesis so it doesn’t
shock me that Bitcoin is the best
performing asset again this year I think
the narrative that we’re living through
right now is 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 and so 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
and 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 and so if that’s the case
uh it’s a race to own hard assets and
bitcoin’s the hardest most advanced
money we’ve come across in human history
and so I think the recent rally the
adoption of an ETF on Wall Street a lot
of the narrative is they’re going to
social I the loss of global debts GDP
and all the deficits through inflating
the currency and uh you better not own
dollars and if you’re going to own
something why not Bitcoin and I think
this is the broader theme of our
conversation today is the adoption of
Bitcoin long term 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 well I think um I I like the
Arthur Hayes quote of bitcoin’s price
equals technology plus Fiat liquidity so
it is a technological Revolution it’s an
innovation satosi Nakamoto solved a
computer science problem that was
perceived to be insolvable before and so
the technology is valuable and the
technology becomes more valuable the
more gets adopted the more provides
utility to Consumers and there’s Network
effects and economies of scale and all
of those buzzwords but then there’s the
Fiat liquidity piece and so Bitcoin
seems to Trend with liquidity Cycles
within the broader macro environment
within the central bank environment and
so 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
which I think has resulted in Bitcoin
just trending up no matter what but I do
expect it to be relatively correlated
it’ll take some time so just broad macro
question then do you expect that
inflation to continue staying sticky in
other words it’s not going to come down
to the fed’s 2% Target anytime soon oh
no chance I 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 what’s the difference
between two and three what’s the
difference between two and 20 yeah uh I
think that government it’s an election
year government has a decision to make
do you want Bank lines or do you want
inflation to run hot because your entire
banking system is insolvent uh and if
you’re going to save them and bail them
out and fix this spond market then
you’re going to have to let inflation
run hot and neither is a good solution
but as a government you got to pick one
and I think historically governments and
empires have picked inflation running
hot they’re not going to if they wanted
Jamie Diamond to go to jail for running
an insolvent bank if you run Bank of
America’s numbers they’re technically
insolvent uh they could have thrown them
in jail in 2008 uh that’s not how they
do it so I expect inflation to run hot
and the currency to be debased you use
the words hard asset to describe Bitcoin
can you just elaborate on what you mean
by that yeah hard it’s a simple concept
it’s the hardest to produce so how hard
is it to make more of it so uh 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 so in my
opinion Bitcoin is the most advanced
money ever created in human history
because it’s the hardest money and money
tends in Trends to be one and the one it
finds is the hard the hardest to make
more of because it’s then the the
easiest way to persist and store value
through time and space well the having
which just happened theoretically it’s
supposed to have pushed up mining costs
supposed to have um well not supposed to
but it did decrease uh the amount of M
bitcoin’s mind per day by half right why
didn’t the price react accordingly why
didn’t we see a huge Spike immediately
afterward which was couple days ago yeah
you know I got a different take than
maybe you’d read online of the having uh
this is my third having as a Bitcoin
I’ve been in the space 11 years uh I
think of it as an inventory reduction
like a commodity inventory reduction I
don’t think it’s something that the
market can necessarily price in or not
price in I think think of it like
there’s one natural seller in the market
and that’s the commodity producer that’s
the minor they have a commodity premium
there’s a cost to produce the asset and
in order to pay down the cost that they
intake in producing it they sell the
finished good that they produce and if
that is going to be reduced by 50% then
the cushion the natural sellers are
reduced by half so all that means to me
is the cushion that the market has to
enter new price Discovery is just
significantly less if for whatever
reason there’s a new found demand cycle
like interest rates lower or some new
nation state adopts Bitcoin whatever
that is you’re going to enter price
Discovery in a lot more violent fashion
so I just considered an inventory
reduction just like the 88 drought for
agriculture Commodities and that’s I
think you tend to see cyclical behavior
that follow the having is because
there’s less cushion and less padding
for the market to take on new demand
okay and what does this mean ultimately
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 having but also keep in
mind they have to compete with AI
companies now for the same data center
so perhaps their fixed costs are going
to go up yeah I think I’ll separate that
one into two questions as well one is
bitcoin’s going to survive no matter
what the protocol actually 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 has got to be
one of the most Cutthroat tough
Industries in the world from the highest
level possible you are competing against
every human on the planet for energy
which is the currency of the universe so
I think that that is just an impossible
industry to master and they’re like
going to be miners that have a really
difficult time there’s likely going to
be miners that are really successful and
like you said energy is consumed not
just in Bitcoin I mean human flourishing
has a correlation to energy our our
ability to commercialize energy from the
Sun is what humanity is all about and so
I think it’s just a Cutthroat industry
no matter how you slice it we’re going
to continue with Jack Mar’s bitcoin
price forecast and his expansion plans
for strike a first a quick shout out to
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turning back to bitcoin itself I’ve
heard you say this on a few uh
interviews or podcasts and on the media
a million dollars for Bitcoin walk us
through your thesis of how it could get
there 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 uh for
really 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 our bank deposits
aren’t there because the bonds that were
purchased with my deposit is underwater
and so if central banks and government
is going to try and save that market the
amount of liquidity that’s needed is
going to send assets very high I mean
you can try and do napkin math and I I
joke like how many cids are we going to
get if they try and bail out this Market
that we’re in today you may get two
three covid so if that happens it’s
impossible to speculate on an asset as
scarce as Bitcoin but I think 250,000 to
a million is the imagination I have in
that range of just how big this can get
and that’s based on all the liquidity
that’s going to be required to make this
Market solvent is that based
on uh a steepening of the adoption curve
which we’ll talk about in just a minute
or is that just based on normal Market
action like more liquidity like you like
you mentioned in the natural course of
time just passing like what what is a
catalyst is basically what I’m asking I
think all the above well you’re we’re
talking about pricing Bitcoin in a piece
of paper that’s being actively debased
right so maybe a more interesting
question is you know how many houses can
I get for my Bitcoins in a year um 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 that the government is in on
the other side of that though on the the
talk of adoption and just 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 and so I expect
more of the world to take on bitcoin as
money whether it be for any form of use
case or value to them because it is so
appealing in solving so many different
problems so I expect adoption of Bitcoin
as as a monetary unit to go up and then
against the dollar in particular and
other Fiat currencies I expect it to be
violent to the upside okay well I I I
think the followup question to your view
is look the lightning network was
created to solve the problem of a slower
transaction speed for Bitcoin right but
why would you just philosophically
speaking use Bitcoin as a medium
exchange at all if you believe it’s
going to go much higher to $250,000 or a
millionar whatever the target may be why
wouldn’t I just hudle it as a store
value yeah well so a guy like me I’m so
convicted I actually 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 there 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 very hard hardest money that is
the best performing asset in human
history so I’m running a short dollar
trade in my everyday life which so I
have to I have to spend Bitcoin um so
that’s why I do but I also I mean we as
a business we have a product line that
moves Fiat currencies over the lightning
Network so we take a little bit of a
separate View and and view that part of
Bitcoin as a payments Network and I
agree with you there are customers of
ours that don’t want to spend Bitcoin
but they do value faster cheaper Global
Payments and so that is the part where
the technology is actually disruptive in
creating new value and disrupting
existing businesses I I’ve never seen an
asset that is so conflicted in its
actual use case as Bitcoin you talk to
five different people I get like at
least three different answers as to
exactly why one should own Bitcoin right
there’s a lot of critics out there who
don’t necessarily agree with your view
in particular right which is that
Bitcoin should be used as payment some
people think it’s just too volatile an
asset why would I pay for something that
moves up and down the way it does right
it’s just not useful as a currency how
would you respond to that well um so I
think I’d agree I I mean I I view
Bitcoin as pure Humanity in the sense
that it’s one of the only free markets
we have left and so I love the idea that
people can do whatever they want with
Bitcoin so if someone says I don’t want
to spend it because all it does is go up
well I’ll shake your hand good for you
you might be right but uh there’s the
concept David in Bitcoin of capital
Bitcoin capital B Bitcoin and lowercase
b Bitcoin lowercase b Bitcoin is when we
are 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 as well and
that’s distinct separate value so you
could say that maybe Bitcoin the unit
can be competitive to the bond market or
the real estate market or dollar Bitcoin
the network can be competitive to Swift
can be competitive to Visa it’s an
entirely different value proposition so
that 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 and so I don’t
disagree with you whatsoever I think the
technology is valued independently of
your personal spending preference well
more broadly um in in regards to your
philosophy of what Bitcoin is you said
in a January interview view that Bitcoin
is the only Innovation that can solve
the biggest financial problem ever which
is Central Banking uh what did you mean
by
that um just that there’s a group of
people that so I think of 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
it’s a market good that you don’t buy to
consume for its own sake but you buy to
then exchange later so you work really
hard David on this podcast and what in
return for that you get money yeah the
fact that there’s a central bank that
can debase the value of your money means
they can de debase the value of your
time and energy and so it is a very real
threat to society uh and so I view
Central Banking and the manipulation of
currency to be a central party that can
manipulate society and human Tendencies
and I think that you’ve been able to see
that over the last 100 years since fat
currency this latest interation of the
dollar has been introduced I think it’s
caused a lot of problems so I viewed
Bitcoin as a solution to that do you
think Bitcoin is becoming more
centralized because of well the Bitcoin
ETFs which allows large institutions to
basically Buy in theory a majority of
the Bitcoin float I mean wouldn’t that
create a central bank for Bitcoin so to
speak no uh so it’s a common
misconception it’s a great question uh
Bitcoin is not proof of stake so that
might very well true for something like
ethereum Bitcoin operates with proof of
work so and and you tell me if you want
to get into that but what that means
from a high level is that uh the I don’t
matter how much you own of the actual
asset itself it gives you no further
influence on the on the wider Network so
someone that owns no Bitcoin versus
someone that owns all the Bitcoins 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
anyone entity owns over the network it’s
distributed in ways that don’t account
for a person’s Holdings okay um another
argument I’ve heard against uh the
bitcoin’s um limited Supply argument
which is that it’s cap at 21 million
therefore it has value there you can
just Fork Bitcoin to Infinity right um
what’s your counter argument to that uh
forking Bitcoin is uh creating a new
asset uh I like the analogy of Chess
have you ever played chess David sure
yeah I’m not very good at it but I
understand the rules
I love yeah I love the game so let’s say
you and I are playing a game of chess
yeah and you’re kicking my butt and then
I fork the game and say my pawns are now
allowed to move like Queens right and
then I Checkmate you
well that we we decided to then not play
chess we’re playing Jack’s chess or
we’re playing Jack and David’s chess or
we’re playing the Tuesday night chess or
the chess we play when we have a bunch
of beers that’s a different game and so
Bitcoin is defined by the consensus
rules the parameters of the system and
that’s enforced by the distributed
Network so 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 just says you
could change the rules of Chess but
you’re just creating a different board
game you can’t you know inflate the
rules of chess the rules are the rules
uh okay so a hard Fork on bitcoin
wouldn’t change the fundamental um core
argument of Bitcoin is having a limited
Supply is what you’re say yeah and we’ve
yeah and we’ve already seen that we’ve
seen these iterations of Bitcoin Cash
There’s Bitcoin gold there’s Bitcoin
faster version Bitcoin inflated version
Bitcoin smart contract version and these
are just different assets that end up
trading and being valued at zero so I
view generally the altcoin space and all
the Bitcoin forks forks to be arbitrages
on the trend in my opinion uh I don’t
view them as valuable whatsoever and
we’ve we’ve seen this play out and uh
yeah the main point is you can’t change
bitcoin’s rules uh the distributed
Network protects against that and if you
do you create a new asset class you
don’t inflate the existing one okay um
let’s move on and talk about Bitcoin as
a form of payment which ultimately is um
one of the um problems that your company
is trying to solve or enhance I mean do
we do we know why Bitcoin is not W as
widely used as let’s say Fiat I mean
you’ve made very compelling arguments as
to why it’s a superior form of money in
many
ways yeah I think and I mean 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 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 today and
so that is what’s carrying the adoption
and that’s why people don’t spend it is
because they buy it to hold it uh I also
do think on the payment side we see a
lot more interest in adoption often
times for cross currency payments cross
border payments because there’s real
friction there the issue is changing
consumer behavior is very very
challenging and very very difficult and
so we see the payments line in that
business it 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 they need a
life raft the central bank is sucking
the time and energy out of their life
well when when you first got involved
with strike right when you when you
first had this business idea what was
ultimately the problem you wanted to
solve so when I founded the company
initially it was based on the lightning
Network’s idea of I I view it as an open
value transfer protocol on the internet
and so what I believe the world
desperately needs is a neutral value
transfer protocol that can get a neutral
value instrument anywhere in the world
in less than a second and at no cost and
people
often think that that implies spending
and using Bitcoin and there’s all this
volatility but we actually can move a
dollar over that value transfer protocol
or a Euro or a pound or a naira and it
opens up new cross currency markets that
were previously impossible because of
the cost so you can do micro payments
and internet tipping and it greatly
enhances and disrupts existing ones that
are very cost prohibitive so that was
the initial thing that brought me to El
Salvador the way the business has
evolved is we’ve turned into one of the
best in the world at Bitcoin period uh
especially after the fall of after FX
and Sam I mean we are one of the most
licensed regulated globally accessible
Bitcoin financial service providers and
in my opinion have some of the best
technology in the world and a lot of
customers come to us for all Bitcoin
buying it selling it storing it sending
it receiving it 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 really 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 and I didn’t see I saw a
hole in the market there I saw 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 I can go okay uh speaking of
Bitcoin as a form of payment Bitcoin
used to be used predominantly as a form
of payment before the Avent of stable
coins and I think a lot of I’ve talked
to several um uh payment vendors and and
platform and they’ve told me that it’s
now 8020 stablecoin versus Bitcoin for
for bdp transactions whereas a couple
years ago it was reverse right um why do
you think that Trend
happened oh I think bitcoin’s volatility
is a user experience problem in payments
um the way we solve that is by moving
Fiat currencies over the Bitcoin Network
so that you can spend a dollar using
this neutral value transfer protocol but
yeah uh stable coins solve that user
experience problem so I believe that’s
the primary driver uh I think people can
flate the idea that stable coins compete
with the lightning Network stable coin
is an asset it’s a euro dollar product
it’s not a network um but I think
they’re going to eventually be
complimentary but I think that’s the
primary driver so for the viewers out
there watching this who may not be
familiar with the lightning Network um
let’s let’s explain how maybe it works
so one of the fundamental problems of
using Bitcoin with the criticism of
using Bitcoin is a medium exchange is
let’s say I go to a store and buy my
coffee with Bitcoin it’s a slow protocol
to transact with lightning fixes this
problem
how uh it takes the payments off of the
blockchain so the Bitcoin blockchain has
to be slow because it accounts for the
reality of physics things like the speed
of light so 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 in
incorporate it and mine it into the
blockchain and that takes time the
lightning Network takes Bitcoin which is
a broadcast protocol so you’re
broadcasting to the whole world and it
turns it into a linkto link protocol
where you’re just broadcasting to your
direct counterpart and if you’re just
talking to one person then Things become
a lot faster and a lot cheaper so it’s
what we call a layer two in the industry
but it effectively allows Bitcoin
payments to be made instantly and at
little to no cost okay and what what
does the end end user have to do to to
to make this happen does he have to
download some sort of software does he
have to use it through an app or does he
have to transact Bitcoin only through
the strike Network yeah hopefully
nothing right like um there’s a lot of
layers of the internet in fact yeah you
know there’s maybe seven um but all you
need to do is download a browser so we
as a financial service provider build
wallets that build all of this in housee
so that it feels and looks like a cash
app or a venmo but of course if you
wanted to build your own internet stack
yourself at home you can you can be your
own ISP and so consumers can set it all
up but nowadays you just download a
Bitcoin wallet a lightning wallet and
those that support the features it it
works out of the box um I just to give a
comparison to the viewers I believe and
correct me if I got the numbers wrong
but I believe that the Bitcoin layer one
transaction speed is roughly around
seven transactions per second whereas
lightning can operate up to a million or
more uh in some cases right so I mean
does this has this has this caused some
regulatory challenges around how much of
an improvement this is over the layer
one no um I think that this is just the
biggest Showcase of programmable money
right uh I mean bitcoin’s going to get
better forever because Engineers are
never done so it’s just about the
coolest thing in the world that we have
a global money that we can work on and
so I think we’ll continue to extend the
functionality and this is only the
beginning in my opinion unfortunately us
humans can’t live forever to see it but
uh it’s it’s it’s great it’s great well
tell tell us about the next steps for
strike and how your expansion could lead
to the concept of hyperbitcoinization
which is that at some point this is an
idea it’s a fantasy but it could happen
it’s at some point everyone in the world
could use Bitcoin for something right
we’re not there yet but how could strike
help us get there yeah well so with
Europe we’re in almost a 100 markets and
I think the difference between our
product and maybe something like 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 then two we
treat it as money so our product is a
wallet and we focus on your ability to
acquire it or sell it if you live on it
and then your ability to store it and
move it as opposed to trade it uh we do
not consider ourselves in exchange more
so than a money app and so we believe
that more of the world is going to adopt
Bitcoin as money because it is better
money it’s harder money and we see that
in our own growth in our own numbers and
so 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 how do you just
convince people to start using Bitcoin
as a form of payment I’ll give you an
example okay so you’ve mentioned El
Salvador where you were um involved in
this is an article from science um
Science magazine uh they’ve concluded uh
this is a long uh paper but they’ve
concluded here in the abstract that
Bitcoin adoption in El Salvador has been
rather weak so far uh one of the issues
that a lot of people don’t yet trust
Bitcoin as a form of payment uh the
study finds that Bitcoin adoption is
strongest and young educated men um
banked men for that matter people with
bank accounts um most respondents didn’t
know what Bitcoin even is were does so
even though it is legal tender in
Bitcoin not everyone still uses it on a
regular basis what would you say to
those people not using Bitcoin um well I
think this kind of comes back to the
idea we’re were talking about earlier
that changing consumer Behavior at that
level is very challenging and difficult
um but on a in 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 actually don’t know the
Bitcoin price when the government of El
Salvador can call the IMF and say yeah
hey guys it was nice knowing you but uh
I’m gonna end the relationship but um I
I don’t know I mean what I would say to
the people is I mean if I were to walk
down to a corner store I guess and no
one was accepting Bitcoin yet I would
say listen it’s a new payments Network
that gives you access to new customers
and there are no chargebacks it’s cash
final there’s no interchange and by the
way 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
the volatility so if you mark it up
property by property it’s better than a
Visa there’s no interchange there’s no
chargebacks it’s cash final it’s open
and interoperable with any service so
you can accept a lightning payment from
cash app from soon Tobe coinbase from my
customers so as a payments provider in a
network it’s h hand over heals better uh
but I think changing consumer Behavior
at that level is difficult uh I think
the adoption you’re seeing from Bitcoin
more organically is people that are
tired of getting poorer through currency
de basement okay but okay so back to you
you mentioned that you transact mostly
in Bitcoin correct how do you how do you
how do you physically do that in your
everyday life yeah so I’m almost running
and we’re going to launch products
around this in a bit um I’m almost
running the Michael sailor trade
personally so what I do I only own
Bitcoin and I spend on credit so I it’s
what sailor does you borrow the weaker
currency harder currency so I have a
credit I have credit cards and I spend
on those and then when I need to pay
those down I sell the Bitcoin to pay
them off I you know I do bill pay with
Bitcoin but in that way I’m borrowing
the currency that only goes down so I
get to spend it without ever needing to
hold it and I hoard the currency that
averages going up 50 to 100%
year-over-year so everything around me
gets 50 to 100% cheaper year-over-year
right it gets a half off every single
year uh and 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
okay and um and are are you okay what
what has your bank said about this um
they haven’t said anything um so far so
good I don’t know um I I can’t imagine
that they have I don’t know maybe
they’ll watch this interview and they’ll
give me a call but yeah I think the
broad question is I think the banks will
start using your method right they’ll
start opening up avenues for people to
also adopt Bitcoin use transactions with
Bitcoin take loans using Bitcoin at what
point do you think the traffi
institutions will start catching up on
this trend Jack well I’d be curious what
they’re going to do about it it I think
that if this gets adopted like a
GameStop Robin Hood Type situation
you’re going to run the banking
institutions in the US ins solvent if we
all hoard Bitcoin and spend on a credit
line of credit cards yeah then banks are
going to go under um but it’s very
obviously the financially responsible
thing to do you know when my buddies are
like know how could you possibly do that
I look him in the eye and say why would
I own something that only goes down
that’s the US dollar so if I if the bank
is going to give me a line of credit and
I can afford to not have to own it and I
get to own and hoard the thing that only
goes up you know I’m a college drop out
David but that’s a very simple trade and
so and so I don’t know I you know we’re
hopeful at strike to launch some
products that make this a lot easier and
more user friendly and I’m really
curious to see the adoption rate of it
because I think it’s obvious uh what
what do you think would incentivize
Merchants at local businesses to start
accepting payments with
Bitcoin um we see it and we work on it
it it grows slower than those that want
to buy Bitcoin like I said yeah but when
people adopted it’s because one you’re
acquiring new customers so Merchants
aren’t married to the Visa Network or
the MasterCard Network they want
customers to spend money at their store
so it acquires a new sector of customers
the payments Network is Cash final so
chargebacks are some of the biggest
costs that Merchants uh occur when
selling goods and services on the
internet so there’s no chargebacks it’s
cash final it’s a physical instrument
that settles in real time and it’s a lot
cheaper because there’s less
intermediaries to broker the finality of
the transaction so it’s cheaper it’s
faster it’s cash final and you get to
acquire a new sector of customers and
for all of those reasons or a few of
those reasons we see Merchants pick it
up more and more does strike allow you
to have the option to let’s say convert
Bitcoin to Fiat in L at a merchant yeah
so we allow customers to send Fiat
currencies over the lightning Network
and allow whether it’s consumers or
acquires or anyone to receive Fiat
currencies over so for example in our
launch with Europe our dollar euro
market so we allow then by Na by nature
of having a btcusd product and then a
BTC e product by proxy we have a USD e
product and that product is actually
significantly cheaper than transfer wise
which the world will know as we launch
so um we allow cross currency payments
or payments to be acquired in local
currency without ever touching Bitcoin
so everyone kind of 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 so so just to clarify would I be
able to let’s say if I have Bitcoin with
strike uh and then I go to like let’s
say a McDonald’s I tap my phone I take
the Bitcoin out from Strike and it
instantly converts to $3 for my Big Mac
or whatever right would that that that’s
how long would that process take less
than a second instantly instantly yeah
yeah so if you think about it um let’s
go through so if I was uh I love cross
currency uh transfers because they’ve
got the most friction it’s the easiest
to understand let’s say that uh I wanted
to send1 us to Nigeria what strikes
going to do is well how much Bitcoin
is10 US dollar worth in our system of
btcusd so we’re interconnected with the
rest of the market and we’re going to
get an amount of Bitcoin then we what is
that amount of Bitcoin worth in naira
and we’re able to send that Bitcoin to
any counterpart in Africa in less than a
second and at no cost and so then what
you’re what you’re seeing is Bitcoin is
almost like the translator like in
Google translate um right like you take
one language you put it into Google’s
translate interpreter and then it comes
out as a different language with cross
currency you take one currency you put
it into Bitcoin and then it comes out as
another currency and so that’s how you
get like a dollar naira Market that’s
50% cheaper than the rest than like
using the Swift Network and clearing
through central banks does that make
sense and so it does yeah just we’re
just trading Bitcoin right like sending
dollars over lightning is a btcusd buy
order because I’m taking the customers
dollars and I’m sending Bitcoin out and
acquiring as a sell order I I think one
of the concerns that a lot of bitcoiners
have had since the collapse of FTX and
Celsius and a bunch of others is that
you know you know the phrase not your
keys not your Bitcoin and people are
have been advocating to use wallets for
that particular reason I know stri is
not a wallet it’s a custodial service so
people don’t actually own their keys
through strike so how would you respond
to people with those concerns that they
don’t actually own any Bitcoin through
strike you know you ultimately you
control the keys right uh yeah we do I
would say take it off the platform uh
and we’ll help you and encourage you to
do that I do believe that there’s room
for financial institutions in Bitcoin I
think I mean centralization provides
efficiencies there’s no doubt about that
that’s why AWS is the best place to a
server in the world is because it’s
centralized with Amazon if we had to run
a distributed AWS it wouldn’t work um
and so the idea of distributed or
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 and that’s what we see in
our growth and our customers but I would
say if you’re not cool with that then uh
hit withdrawal and we’ll process it okay
fair enough uh finally what’s next for
strike besides your European expansion
are you are you thinking of the entire
world or are you just limiting it to you
know certain jurisdictions for now
whatever you can comment on at this
point yeah 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 uh the way I I
kind of open with this the way I think
about it is global debt to GDP is so
ludicrous and the whole world the
collective governments have borrowed so
much from our future no way to pay it
back and everyone needs Bitcoin and so
as a Bitcoin financial service provider
someone that holds the 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 and what I think is the
greatest wealth transfer of all time and
the great reset and the future of money
so we’re just going to keep our head
down and keep going if you had to guess
which markets or which areas in the
world would adopt Bitcoin the fastest as
a form of payment would it be the
developing countries or the developed G7
countries for example I think the
developing I think the developed the
Western world is going to adopt it uh as
a hedge against Fiat debasement like
we’re seeing on Wall Street the store of
value use case I think Wall Street is
leading this charge of oh my gosh and
you know they’re sending gold to new
highs and Bitcoin as well and I think
the developing uh will adopt it more as
a medium of exchange first finally I
have to before I let you go I have to
get your thoughts on
altcoins um you know uh uh it’s it’s
pretty broad we won’t have time to go
through all the alt coins let’s start
with eth um in particular you’ve called
it a Tech play in the past uh
y Kathy Wood recently stated her love
for eth she said just today in an
article that she expects the cap to
reach $ 20 trillion by
2032 um with 120 million tokens that
equates to
$166,000 per token um she’s basing this
this the rationale is she’s basing this
on the fact that um there’s going to be
massive adoption uh with defi
applications being built on eth
expanding can you comment on that um I
think she’s wrong I guess is the short
answer but um I I do view I don’t think
any of these altcoins are money which is
a subtle comment but it means a lot um
ethereum ethereum went through a dow
hack I don’t know if you’re familiar
David 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 and to
me that was the first instance of what
has become many of a prioritization of
being a technology that wants to be
further adopted by developers and not a
money that can be acted as the neutral
based currency of the world and so
that’s why I view Bitcoin as the only
money that’s come out of this sector and
everything else as a 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
built technology I have strike shares
that’s a security that’s an equity um
the the issue I have is why then do you
need your own currency that’s when I
think things get a little messed up is
oh yeah I’m saving the world oh really
how do I get involved well you buy the
currency I created well now I now I
start to disregard your opinion a little
bit you’re just it seems to be a a less
legally accountable way to be a central
bank as oh sorry that Siri I think it’s
a it’s a less legally accountable way to
be a central bank than it is anything
else in my opinion it’s it’s a lot of
people’s excuse to create their own
money and and sell it to the public so
that’s my brutally honest take on
ethereum I think uh that less legally
accountable way is uh now like the SEC
is catching on to that I think that’s
what they’re taking the issue with so
that’s my opinion I I think it’s an
Arbitrage on the trend and it won’t last
forever you don’t think that the
argument that it’s a deflationary asset
u meaning that it gets burned um isn’t
going to boost the value at some point
no but it 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 these are centralized entities
these are not you know distributed
neutral so so you wouldn’t you wouldn’t
consider Building strike on any other
protocol besides
Bitcoin uh no and it’s nonsensical oh by
the way strike
our servers run on centralized servers
because we care about efficiency and
speed to customers right I think if you
wanted to run a distributed Network for
some application great and you wanted to
use money I’d use Bitcoin but if you’re
going to run a distributed Network and
then introduce your own currency that’s
when I start to have questions for you
is what’s the need for that if it’s not
to enrich enrich yourself so so what how
do you define a
shitcoin um I think a shitcoin is a
currency that that uh was founded and
distributed and has outside influence
from a central group um personally like
I don’t think gold is necessarily A
shitcoin yeah uh I I view the US dollar
as a shitcoin I view ethereum as a
shitcoin I view all the altcoins as
shitcoins okay uh is there anything that
could in your opinion um be the closest
in solving the blockchain tremma
scalability
security um what was the third one uh
decentralization well the problem I have
is I think Bitcoin does a great job at
it you know here’s here’s a a mental
exercise I think is interesting David in
every single thing on planet Earth with
more Supply you find more demand yeah
the reason that I can’t store my value
in iPhones is I’ll buy 10,000 iPhones
today and then sell them for 10x the
price in 10 years because the demand for
iPhones is going to go up is because
with more demand for iPhones Apple can
just produce more iPhones so the price
will never go
okay right does that does that make
sense so I I think the the only asset
that uh can actually solve of that is is
Bitcoin um bit Bitcoin is the only asset
in instrument where with more Supply or
with more demand you cannot find more
Supply um so I I don’t I I don’t know I
I don’t think uh
Bitcoin has I don’t think any of these
guess my point is in Bitcoin with more
demand you can’t find more Supply you
get more shitcoins sorry I had to just
cut to the chase there does that make
sense see what we’re seeing in this
industry is when there’s more demand for
this asset and for this technology you
can inflate the Bitcoin so what you do
get is a bunch of shitcoins and a bunch
of arbitrages on the trend and a bunch
of people that are trying
to in inflate the Revolution and
innovation and sell it to the public 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 the idea of Bitcoin as a
money you would give up on the idea of
Bitcoin as a hard asset um and you would
move on to do something else with your
business what would that hypothetical
event or series of events
be well I I believe money wants to be
one and money tends to be the hardest so
if there were to be a harder form of
money I would adopt it along with the
rest of the world logically uh and so 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 I think bitcoin’s that big of
an innovation where this thing is going
to last hundreds or thousands of years
and I’m just luy to be alive during the
beginning wow okay great where can we
follow you jack learn about you learn
about
strike oh man I’m all over the internet
I that’s where I spend all my time I uh
I sit here on my computer and talk to
guys like you so I’m Jack MERS on
Twitter and everywhere else and uh yeah
strike is available in close to 100
countries so if you want to get the best
out of Bitcoin give it a try let us know
what you think all right we’ll put the
links down in the description below make
sure to give Jack a follow make sure to
give strike a follow thank you very much
for your time Jack it’s a great honor
meeting you likewise brother thanks for
having me thank you thank you for
watching don’t forget to like And
subscribe

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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0:00 – Intro
2:10 – Bitcoin rally
4:16 – Bitcoin adoption
5:30 – Inflation outlook
6:33 – ‘Hardest’ money of all
7:30 – Bitcoin halving and mining
10:27 – $1 million Bitcoin
13:04 – Bitcoin’s use case
16:03 – Central banks and money
17:20 – Bitcoin decentralization
20:10 – Bitcoin as currency
21:28 – Strike
23:30 – Bitcoin vs stablecoins
24:45 – Lightning Network
27:40 – Hyperbitcoinization
30:39 – Spending with Bitcoin
37:35 – Strike’s expansion plans
38:57 – Ethereum
42:55 – Blockchain trilemma
44:41 – What would change Jack’s mind about BTC?

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