Original source: The dollar is rapidly depreciating! Bitcoin veteran Jack Mallers: Currency crises in various countries! 42,000 Bitcoin aircraft carriers!
Compiled by: Daisy, ChainCatcher
Editor’s Note:
This article is compiled from a video interview between Jack Mallers and hosts David Lin and Bonnie Chang. Jack Mallers is the founder of Bitcoin payment platform Strike and co-founder and CEO of investment company 21 Capital. He has long been committed to promoting the practical application of Bitcoin in global payment and capital markets.
In the interview, Jack deeply explored the logical basis of Bitcoin as a global store of value, analyzed new indicators such as Bitcoin per share (BPS) and Bitcoin rate of return (BRR), and pointed out the essential difference between 21 Capital and traditional ETFs. He also shared how Strike flexibly builds products according to local needs in different countries, as well as the political and macro background behind the institutionalization of Bitcoin.
The following content is a compilation and editing of the interview.
TL;DR:
The essence of currency is a tool for storing and exchanging labor, and Bitcoin is currently the best choice for storing value.
Under the pressure of debt and deficit, the value of Bitcoin as a scarce asset has become increasingly prominent.
The dollar output model is collapsing, and Bitcoins position in the global storage system is becoming increasingly prominent.
Volatility is the prerequisite for obtaining returns.
Risk does not equal volatility. The real risk is systemic failure.
21 Capital launches the “Bitcoin Per Share (BPS)” and “Bitcoin Rate of Return (BRR)” indicators to reconstruct the capital market evaluation system.
Unlike ETFs, 21 Capital increases investors Bitcoin exposure through operations rather than static holdings.
Bitcoin rules are determined by global node consensus and cannot be tampered with by governments or institutions.
Bitcoin is not a political bet, but a financial system built on mathematics and freedom.
The real risk is not volatility, but centralization and the systemic failure of trusting counterparties.
The value logic of Bitcoin and the global currency structure
Bonnie: Do you think that the continued decline in the purchasing power of the dollar and the passive weakening of the US currency will naturally drive the world to Bitcoin, or will it take a major event such as a financial crisis or war to trigger the shift?
Jack: Currency, like other commodities, has advantages and disadvantages in the free market. But unlike consumer goods, the function of currency is to store and exchange peoples time and labor. Even without a crisis, people will naturally choose the best storage tool. Bitcoin has significant advantages in this regard.
Bonnie: You mentioned that Bitcoin has a 400 to 500-fold growth potential. What is the basis for this estimate?
Jack: I am not predicting the price, but analyzing the market size that Bitcoin faces. The total value of global assets is about 900 trillion US dollars, of which about half is used for value storage. In other words, humans are looking for tools to store 400 to 500 trillion US dollars. Bitcoin is currently the most promising value storage carrier. It is not only a product of technological progress, but also an innovation in the way of value storage. In contrast, the global stock market is only about 150 trillion US dollars. Comparing Bitcoin with stocks or Ethereum seriously underestimates its potential and positioning.
David: Some investors were disappointed that the price of Bitcoin did not rise after Trump took office. Are you surprised by this?
Jack: I am not surprised because the market expectations were wrong. They thought that Trumps inauguration would bring about liquidity expansion, but the actual situation was tightening. To understand the current situation, we need to look back to the post-World War II period, when the United States became the issuer of the worlds reserve currency with its gold reserves. It established a paper-for-real system by exporting dollars and importing goods, and gradually shifted from manufacturing to financial dominance. This structure is no longer sustainable. Trumps reiteration of manufacturing and fiscal balance is a response to the problems of debt and structural deficits. Against this background, the value of Bitcoin as a scarce asset has become increasingly prominent.
David: Some people believe that Bitcoin is highly correlated with the stock market, while others believe that its trend is more influenced by the global M2 money supply. What do you think?
Jack: I agree that Bitcoin is closely related to global M2. Against the backdrop of a depreciating dollar, most asset prices have risen, and the apparent correlation is actually driven by monetary policy. Bitcoin is a sensitive indicator for monitoring fiat currency liquidity, combining technical attributes with the ability to combat currency over-issuance. For example, Chinas trade surplus funds flow into U.S. stocks and real estate, pushing up asset prices and exacerbating bubbles and the gap between the rich and the poor. Once this type of capital no longer flows into U.S. stocks, Bitcoin will break away from the stock market trend and demonstrate its independent value. It does not rely on profitability or valuation, but returns to real demand and scarcity.
Bonnie: If Bitcoin becomes a mainstream store of value, how will it affect the valuation of human capital, stocks, and real estate?
Jack: Bitcoins proof-of-work mechanism makes it an energy currency that must be created through time and energy, and has scarcity and anti-inflation capabilities. When people can save and plan for the future, society will be more stable. The more difficult it is to create currency, the more society can withstand uncertainty.
Bonnie: You hold almost no dollars, how do you achieve that?
Jack: I don’t hold assets that depreciate in the long term, I only keep the best performing ones. I use Strike to receive salary, take out loans and pay bills in Bitcoin, which not only preserves assets but also meets liquidity needs. Such services are making Bitcoin more practical.
David: Peter Schiff believes that Bitcoin has no intrinsic value and that high volatility means high risk. How do you respond to this view?
Jack: Volatility is the prerequisite for obtaining returns. The Sharpe ratio measures the returns brought by volatility. If high volatility is accompanied by high returns, it is worth it. Risk is not equal to volatility. The real risk is systemic failure. Bitcoin is based on mathematics and does not rely on counterparties. It is inherently lower risk.
Bonnie: For ordinary people, Bitcoin is more difficult to manage than a bank account. How do you solve the concerns about private keys being lost or hacked?
Jack: The uniqueness of Bitcoin lies in its freedom of use. You can keep your private key yourself or choose custody.
While I encourage users to increase their sense of sovereignty, the key point is that it provides choice. This ability to fully control your assets is not available in other financial systems.
David: Bitcoins Sharpe ratio has been better than most assets over the past decade. Why is institutional allocation still low?
Jack: The process of institutions allocating Bitcoin is slow, but the trend is upward.
People often overestimate short-term changes and underestimate long-term impacts. Despite the complex institutional structure, I have seen that the demand for Bitcoin in the capital market continues to rise, and the allocation ratio will continue to increase.
Bonnie： You are developing Bitcoin-related products, right?
Jack: Yes. The current market lacks institutional Bitcoin representatives, and we hope to enter with blue-chip qualifications and scale. Not only do we hold billions of dollars in Bitcoin, we also have strong capital and Wall Street resources, and more importantly, we focus on building products rather than simply hoarding coins. As a participant in the Bitcoin protocol, we understand technology and growth opportunities, and our goal is to build a bridge between technology and the capital market to drive the growth of Bitcoin per share.
21 Capital: Building a “Bitcoin per share” growth model
Bonnie: Do you have any upcoming schedules or plans you can share?
Jack: We are currently in the process of going public through a SPAC merger with Cantor Equity Partners, which is still under review. XXI Stock is our first product, and my focus is on advancing the listing process and communicating our business philosophy and the value of Bitcoin to the public.
David: Does large institutions holding large amounts of Bitcoin threaten its decentralized spirit? What do you think?
Jack: Bitcoin is designed so that the amount of holding does not affect control, which is different from the proof-of-stake mechanism. It is a permissionless system that anyone can participate in freely without excluding specific holders. Everyone is equal before the rules, which is the essence of Bitcoin.
David: Do you plan to take the company public and list it on an exchange?
Jack: Yes, we have applied to merge with Cantor Equity Partners and go public with the stock code XXI, which is still under review.
David: As a Bitcoin-centric company, would you consider hedging against price fluctuations?
Jack: We will not hedge Bitcoin assets. The company introduced Bitcoin per share (BPS) and Bitcoin rate of return (BRR) as new measurement standards, focusing on increasing the number of Bitcoins represented by each unit of stock. We hold for a long time and do not sell coins. Our goal is to create a growth capital market tool with Bitcoin as the core.
Note:
Bitcoin per share (BPS): refers to the number of Bitcoins represented by each share of a company, used to measure shareholders actual Bitcoin exposure, similar to earnings per share (EPS) in traditional finance, but measured in Bitcoin.
Bitcoin Return (BRR): refers to the growth rate denominated in Bitcoin, which is used to measure the companys ability to increase its Bitcoin assets through operations without selling Bitcoin.
David: You mentioned the BRR concept, how is 21 different from the Bitcoin ETF?
Jack: Investing in 21 is investing in an actively operating company with the goal of increasing the value of each Bitcoin share. In contrast, ETFs such as IBIT are static exposures, and the number of Bitcoins bought and held does not change. 21 continues to expand its Bitcoin exposure through financing and business growth. We combine blue chip qualifications with start-up potential and are committed to allowing shareholders to grow with Bitcoin.
David: You are also the CEO of Strike. Will these two companies overlap in the future?
Jack: There is no overlap. Strike and 21 are completely independent. Strike is consumer-oriented and provides services such as loans, transactions, and custody; 21 is capital-oriented and focuses on Bitcoin investment tools. Their positioning and goals are different.
Strikes product strategy and global implementation
Bonnie : How does Strike operate in countries with unstable currencies or weak banks?
Jack: We customize products by region. In the United States and Europe, we support local fiat currencies and Bitcoin; in Latin America and Africa, due to the instability of fiat currencies, users prefer the USDT + Bitcoin combination. We are user-oriented and do what they want. This is the key to our success.
David: Will you adjust your strategy in the face of a more friendly crypto regulatory environment?
Jack: A friendly regulatory environment is conducive to entrepreneurship, and I am also happy to develop in the United States. But Bitcoin does not rely on any politicians. It is a decentralized technology that transcends parties and political situations. Truly valuable things do not rely on anyones support.
David: After the regulation is relaxed, if banks provide crypto services, are you worried about being replaced?
Jack: Im not worried. Traditional banks lack the understanding and product capabilities of Bitcoin, but we do. The key is to focus on yourself and do your best. I was also questioned five years ago, but we persisted. Even if Jamie Dimon (Chairman and CEO of JPMorgan Chase) becomes a Bitcoin banker one day, I will be happy to discuss it again.
An immutable protocol: How Bitcoin protects itself
Bonnie: If a government or institution holds a large amount of bitcoin, is it possible to jointly modify the upper limit of 21 million bitcoins?
Jack: Impossible. Bitcoin rules are jointly determined by global operating nodes, and no one can unilaterally change them. Historically, those who have tried to modify them have ended up forking, resulting in a significant reduction in value. Bitcoins neutrality and immutability are at its core. Once the rules are changed, it loses value. The incentive mechanism also encourages participants to maintain the system rather than destroy it, and the total upper limit is almost impossible to change.
Bonnie: What changes have occurred in your understanding of Bitcoin?
Jack: I initially viewed Bitcoin as a competitor to PayPal, but later realized that it is a core technology for storing time and energy. It made me re-understand the meaning of currency and the value of strong currency to social collaboration and long-term development, and it also profoundly influenced my financial outlook and decision-making methods.
David: Would you still buy pizza with Bitcoin now?
Jack: No. I use my credit card to pay for my purchases, and then I use Strike to pledge my Bitcoins to pay off my debts. This way I can keep my Bitcoins and still meet my daily expenses. Bitcoin is a savings tool, and dollars are for spending.
David: If I buy you a pizza with Bitcoin, would you accept it?
Jack: No, I will not exchange high-quality currency for depreciating assets. Data shows that long-term holding of Bitcoin can reduce the cost of living. In 2011, it took 1.8 million Bitcoins to buy a house, but now it only takes 4.7. The more Bitcoins are saved, the more valuable they are, and the more US dollars are spent, the more they shrink, so I save Bitcoin and spend US dollars.
