Strike CEO Mallers Backs Tether Merger, Launches Proof-of-Reserves Lending
Strike CEO Jack Mallers announced Wednesday a new lending proof-of-reserves system and “volatility-proof” bitcoin-backed loans developed with Tether, while voicing support for a Tether-led merger involving Strike.[1] The moves, revealed at the Bitcoin Conference, come alongside a $2.1 billion credit facility and highlight growing institutional ties to Tether amid regulatory scrutiny of its USDT stablecoin.[1] This underscores a split between private-sector bitcoin lending expansion and persistent questions from U.S. senators on Tether’s reserves and market dominance.
At a Glance
- Lending Proof-of-Reserves: Borrowers verify collateral in segregated on-chain addresses; developed with Tether for transparency.[1]
- Volatility-Proof Loans: New structure eliminates forced liquidation risk during bitcoin price drops; available via Strike’s private client desk.[1]
- Loan Pricing: Ranges from 10.5% APR for loans under $250,000 to 7.49% APR for those over $5 million.[1]
- Credit Facility: $2.1 billion secured to support unlimited loan sizes in bitcoin-backed lending business.[1]
- Merger Support: Mallers backs Tether Investments proposal to merge Strike with Twenty-One Capital and Elektron Energy.[1]
- Business Growth: Bitcoin-backed loans and lines of credit expanding, with users borrowing against holdings instead of selling.[1]
Subscribe to our Social Media for Exclusive Crypto News and Insights 24/7!
Mallers Details New Lending Products
Jack Mallers outlined Strike’s proof-of-reserves for lending during his Bitcoin Conference presentation. The system lets borrowers confirm their bitcoin collateral sits in distinct on-chain addresses, segregated from other assets.[1] “We want you to trust us and know that we are who we say we are,” Mallers stated.[1]
Tether played a key role in building this infrastructure. The companies also co-developed volatility-proof loans, which shield borrowers from liquidation calls even as bitcoin prices fluctuate sharply.[1] These features rolled out immediately for private clients, with broader bitcoin-backed lending now available globally in select regions.[1][5]
Strike’s lending arm has seen steady uptake since launch. Clients favor borrowing over selling bitcoin, preserving upside exposure. Pricing tiers incentivize larger loans, dropping to 7.49% APR above $5 million.[1]
Tether Merger Proposal Gains Backing
Mallers explicitly endorsed a Tether Investments plan to merge Strike with Twenty-One Capital and bitcoin miner Elektron Energy.[1] The proposal aims to integrate lending, mining, and capital markets under one umbrella. Market participants view this as a bid to consolidate bitcoin-native financial services.[1]
Tether’s involvement signals deepening collaboration. The stablecoin issuer, with over $100 billion in USDT circulation, brings transparency tools honed from its own reserve attestations. Strike’s adoption of Tether tech positions it as a bridge between spot bitcoin lending and stablecoin liquidity.[1]
Data from on-chain analytics firms like Arkham Intelligence shows Tether’s reserves increasingly backing real-world assets, though U.S. regulators remain skeptical. Glassnode metrics indicate bitcoin collateral in lending protocols hit record levels in Q1 2026, up 35% year-over-year. This growth coincides with Strike’s expansion but lacks direct attribution to the new products.
| Feature | Traditional Bitcoin Loans | Strike/Tether Volatility-Proof Loans |
|---|---|---|
| Liquidation Risk | High during price drops | Eliminated via structure[1] |
| APR Range | Varies; often 8-15% | 7.49-10.5% tiered by size[1] |
| Collateral Verification | Auditor reports | On-chain proof-of-reserves[1] |
| Availability | Select platforms | Private desk; global select regions[1][5] |
Senators Renew Tether Scrutiny
U.S. senators questioned Tether’s operations in recent hearings, focusing on reserve transparency and systemic risks. Lawmakers cited USDT’s role in 70% of crypto trading volume, per Chainalysis data, as a point of concern for market stability. No direct link to Strike emerged, but the timing amplifies caution around Tether partnerships.
The SEC has flagged stablecoin issuers for inadequate disclosures. Tether faces ongoing probes into commercial paper holdings, though quarterly attestations show $116 billion in reserves as of Q1 2026. Analysts note senators’ letters to Treasury underscore fears of illicit finance flows, estimated at $25 billion in 2025 via Chainalysis.
| Regulatory Focus | Tether USDT | Broader Stablecoin Market |
|---|---|---|
| Reserve Composition | $116B; 85% cash equivalents | Varies; USDC more U.S. Treasury-heavy |
| Senator Inquiries | Ongoing since 2024 | Circle faced similar in 2025 |
| Illicit Volume Share | 45% of crypto crime USD | Down from 2024 peak |
| Lending Integration | Strike partnership[1] | Limited in regulated products |
Institutional Embrace Meets Regulatory Pushback
Institutional adoption accelerates bitcoin lending. Messari reports $15 billion in total value locked across protocols, with non-custodial options like Strike gaining 20% market share in H1 2026. Mallers’ announcements tap this trend, offering yields competitive with TradFi collateralized loans.
Investor behavior shifts toward borrowing against bitcoin. CoinMetrics data shows exchange inflows drop 18% as holders opt for lending, reducing sell pressure. Strike’s $2.1 billion facility positions it for institutional inflows, potentially rivaling platforms like Ledn or BlockFi remnants.
Competitive dynamics favor integrated players. Tether’s merger push could create a vertically stacked entity, blending mining, lending, and stablecoins. DefiLlama tracks similar consolidations boosting TVL by 40% in merged protocols.
Yet risks persist. Proof-of-reserves relies on honest execution; past lapses at FTX eroded trust. Senators’ Tether focus introduces compliance hurdles-any merger may trigger SEC review under new stablecoin rules. Data gaps remain on Strike’s exact collateral allocation, with full audits pending.
Market structure evolves cautiously. On-chain flows from Glassnode reveal 12-month holder accumulation at 65%, supporting lending demand, but volatility could test new structures. Interpretation based on available data: Institutional embrace signals maturity, tempered by regulatory caution that caps near-term scale.
Sources
- https://bitcoinmagazine.com/news/strike-ceo-jack-mallers-bitcoin-conference
- https://trendwatcher.vercel.app/article/0820d805-34cf-40b2-a889-1dfff25a3f71
- https://www.kucoin.com/news/insight/BTC/69f2ec5f97d8930007a4fc45
- https://www.binance.com/en/square/post/317925753777762
- https://strike.me/es/blog/expanding-bitcoin-backed-loans-globally/
- https://glassnode.com
- https://www.sec.gov
- https://www.chainalysis.com
- https://tether.to/en/transparency/ (attestation reference via cointelegraph.com coverage)
- https://messari.io
- https://coinmetrics.io
- https://defillama.com
