'You sell what you can, not what you want': Jack Mallers says bitcoin is pricing a global liquidity crisis

Jack Mallers says Bitcoin trading below $63,000 is not a sentiment problem, but rather  the only honest read on a global financial scene that has run out of liquidity, and central markets are too distorted to say so.

Speaking to The Block live from BTC Prague on this week, the Strike founder and Twenty One Capital CEO argued that Bitcoin's decline from above $100,000 a year ago is a signal, not noise.

Consumer sentiment as measured by the University of Michigan has never been lower in recorded history — below 2008, below 2000, below the 1980s — while the S&P 500 sits at an all-time high.

"Bitcoin is the closest thing we have to the monetary reflection of truth," Mallers said. "Active 24/7 traded indicator of how the world is doing."

A world selling what it can

Mallers framed the current selling pressure in blunt terms.

Nations are funding wars, AI buildouts and deficit spending simultaneously. In the middle, individuals are late on their credit card bills and rent.

The throughline, in his view, is the same and points to a world in cash-raising mode, liquidating whatever is most liquid. "You sell what you can, not what you want," he said.

Strategy's sale of 32 bitcoin last week — its first since late 2022, executed to fund distributions on its perpetual preferred stock — also drew a pointed response from Mallers, who said the move was about conditioning markets to accept that the company's "never sell" posture is no longer operationally tenable.

Strategy subsequently purchased 1,550 BTC the week after, as The Block reported.

Questioning Strategy's capital stack

Mallers said he has gone on record with questions about Strategy's perpetual preferred instruments, not because the structure is inherently flawed, but because he cannot resolve how the company makes its entire capital stack whole simultaneously.

The company now carries four classes of claimants, including bitcoin, common equity, perpetual preferred stock, and debt holders. The perpetual preferreds are non-callable and carry an 11.5% coupon, creating what Mallers described as a permanent liquidity obligation with no natural exit.

Paying that bill, he argued, forces a choice every time. Selling bitcoin satisfies common shareholders, preferred holders, and debt holders, but damages bitcoin and bitcoin holders. Selling common equity satisfies bitcoiners, preferred holders, and debt holders, but disadvantages common shareholders.

Declining to pay preferred holders entirely is the third option, and one he did not view as realistic. "How do you make the whole capital stack happy?" Mallers asked.

He said the public exchange with Saylor at BTC Prague — clips of which circulated widely — was not a premeditated publicity stunt. Mallers said he had raised the mNAV and dilution questions on a panel earlier in the day, left the venue, and received a message that Saylor had responded from the stage and invited him back, so he canceled his ride and walked back in.

"I have plenty of conversations with Michael," Mallers said. "Go to dinner all the time."

He added that he has not used perpetual preferred instruments at any company he has founded, citing his own incomplete understanding of their long-term dynamics as the reason.

Strike: Lending is the standout

Against a backdrop of tighter user acquisition, Strike's revenue is still on track to grow year-over-year, Mallers said, though new user registrations and active bitcoin buyers have declined.

The business line that has outperformed every other product Strike has launched is bitcoin-backed lending. Mallers estimated the total CeFi bitcoin-backed lending market at between $20 billion and $30 billion against a $1.25 trillion asset class — a fraction of what he sees as its natural size.

Strike recently launched a no-liquidation loan option, under which borrowers pay a slightly higher fee and Strike uses the premium to hedge, eliminating forced liquidation risk entirely. The company is also introducing quarterly proof-of-reserve audits and segregated collateral for high-value clients.

Mallers declined to discuss Twenty One Capital or the proposed Tether-backed merger with Strike and Elektron Energy, citing public-company legal constraints, and directed viewers to his Monday live stream for XXI updates.