Strike, the payments app built on Bitcoin’s Lightning Network and founded by Jack Mallers, has rolled out a new lending program that allows both personal users and corporate clients to borrow cash using their Bitcoin as collateral.
The announcement came on Tuesday via Mallers’s social media post, where he highlighted the company’s goal of giving Bitcoin holders access to funds without having to sell their holdings.
Program Details and Fees
Under the new Strike Lending service, borrowers can tap into their bitcoin wealth while holding onto their crypto upside. There is no origination fee and no penalty for repaying early.
Strike says it will offer loans at an annual percentage rate starting at 12%, with flexible terms and no credit check. Customers can grow an existing loan through top‑ups, and soon they will be able to find options with no set minimum or maximum amounts.
Target Users and Expansion Plans
According to Mallers, the program is currently available in the United States and will soon be available internationally. He also disclosed that, subject to an internal check, individuals or businesses looking for loans totalling more than two million dollars may apply.
The company’s broader vision is to refine rates, add proof‑of‑reserves features, and expand the service to more markets over time.
How It Works?
Borrowers simply lock their Bitcoin as collateral on Strike’s platform and receive cash in their bank account. Because there is no sale of Bitcoin, users keep the potential gains if the asset’s price rises faster than the loan’s interest rate.
Mallers described this structure as aligned with the journey toward what he calls “hyperbitcoinization,” where bitcoin’s growth outpaces the cost of borrowing.
Also Read: Crypto Lending Market Shrinks Dramatically, Dropping 40% to $36.5B in Q4 2024
Strike’s Role in Bitcoin Adoption
Strike is known for enabling instant, low‑cost Bitcoin payments. The startup played a key part in El Salvador’s Bitcoin rollout, helping set up the infrastructure that lets citizens spend cryptocurrency in everyday transactions.
Mallers also serves as CEO of Twenty One Capital, a Bitcoin treasury firm backed by Tether, Bitfinex, Cantor Fitzgerald, and SoftBank. Twenty One is set to go public through a SPAC merger.
The crypto lending sector shrank sharply after the market downturn of 2022, which saw major lenders like BlockFi, Celsius, and Genesis collapse under financial strain.
A recent report from Galaxy Research found that the overall crypto credit market has declined by 43% from its peak of $64.4 billion in late 2021.
Centralised finance lenders now account for a smaller slice of total lending, with Tether, Galaxy, and Ledn holding roughly $9.9 billion combined by the end of 2024.
Collateral and Risk Management
Crypto loans depend on loan‑to‑value ratios, which determine how much can be borrowed against the value of the collateral. Strike’s proof‑of‑reserves approach aims to give borrowers confidence that the platform holds enough assets to back outstanding loans.
This model contrasts with some past failures in the industry, where a lack of transparency left customers exposed.
With Strike Lending, Mallers hopes to offer a safer, more transparent way to unlock liquidity from bitcoin holdings. He indicated that the platform will keep evolving, adding features that benefit customers and exploring new ways to blend blockchain technology with traditional financial services.
By maintaining low fees and removing barriers like credit checks, Strike aims to appeal to a wide range of bitcoin enthusiasts and businesses alike.