Fiscal engine failing? Bitcoin sparks hope. Jack Mallers discusses US debt, economy, and Bitcoin's role in 2025.
Timestamp Overview
[00:00:02 - 00:02:00] Show Introduction and Bitcoin Update
- Jack welcomes viewers to “Mailbag Monday” and thanks them for support, noting the show has over 35,000 YouTube subscribers.
- He shares the current Bitcoin price at $115,220, down from its all-time high, and mentions the block height for Bitcoin enthusiasts.
- Jack explains he’ll move business updates to the end based on viewer feedback to avoid feeling like a commercial.
[00:02:00 - 00:05:00] Feedback and Show Format Changes
- Jack discusses his companies, Strike (a Bitcoin financial services firm) and 21 aka Twenty One aka XXI (a Bitcoin-holding company planning to go public).
- He announces business updates will now come at the end, after macro news and before Q&A, so viewers can skip if uninterested.
- The episode’s title is introduced: “The Fiscal Engine is Failing and Bitcoin is the Spark,” teasing economic issues and Bitcoin’s potential role.
[00:05:00 - 00:10:00] US Treasury Debt Issuance News
- Jack explains the US government shifted $450 billion in debt from Q2 to Q3, meaning they’re delaying borrowing money.
- This shift caused Bitcoin and stocks to drop because it shows problems in finding people or countries to lend money to the US.
- He simplifies bond math: higher yields mean lower bond prices, indicating less interest in lending to the government.
[00:10:00 - 00:15:00] Reasons for Debt Delays and Market Impacts
- Reasons for delay include lack of buyers (like China not buying since 2014) and high interest rates making borrowing expensive.
- Despite less debt issued, bond yields rose, showing weak demand even with limited supply available.
- Jack notes the US is borrowing over $1 trillion in Q3, living “paycheck to paycheck” as a country.
[00:15:00 - 00:20:00] Broader Economic Issues and Government Responses
- A stronger dollar hurts US manufacturing and jobs, leading to reliance on finance and imports.
- The government is pressuring the Federal Reserve to lower rates and is promoting Bitcoin and stablecoins for new funding sources.
- Trump demands Fed chair Jerome Powell resign, and there’s now a WhiteHouse.gov/crypto page to boost digital assets.
[00:20:00 - 00:25:00] Stablecoins and Bitcoin’s Role
- Stablecoins like Tether hold $127 billion in US treasuries, acting as new lenders to the government.
- Big banks like Goldman Sachs are turning $7.1 trillion in funds into digital versions for easier use.
- Bitcoin acts as a “liquidity sponge,” absorbing extra money to limit inflation while helping government finances.
[00:25:00 - 00:30:00] Social Impacts of Economic Policies
- Strong dollar policies have hurt middle America, causing job loss, drug issues, and lower homeownership rates.
- Childhood health problems have risen, linked to economic choices favoring finance over production.
- Ideas like Bitcoin as a government tool are gaining popularity on social media.
[00:30:00 - 00:40:00] Company Updates: Strike
- Strike now offers business bill pay with cash or Bitcoin, plus lending for businesses in Australia.
- Lending expanded to Colorado with low rates and no extra fees; widgets added for easy loan tracking.
- International features like virtual USD accounts help users in places like Colombia send and receive money easily.
[00:40:00 - 00:45:00] Company Updates: 21 and Closing Thoughts
- 21 aka Twenty One aka XXI expects to hold at least 43,500 Bitcoin before going public, with proof of reserves available online.
- Jack guesses the US government might be hiding its Bitcoin holdings because they’re smaller than expected.
- He recommends watching his Bitcoin Prague talk for deeper history on money and society.
[00:45:00 - 00:55:00] Q&A Session
- Explains why US 10-year treasury demand is low despite rates, comparing it to overpriced lemonade.
- Bitcoin price rise boosts stablecoin demand because they’re paired for trading globally.
- Recommends cold storage like Coldcard for advanced users or Bitkey for beginners.
Notable Quotes
Show Feedback
I listen to the people. Hey, they can say what they want about me, but one thing they can't say is I don't listen to the people.
Jack Mallers @jackmallers
Fiscal Issues
The Fiscal Engine is Failing and Bitcoin is the Spark.
Jack Mallers @jackmallers
Debt Delays
The US Government has to issue debt to finance itself... they shifted $450 billion of new issuance from Q2 to Q3.
Jack Mallers @jackmallers
Bond Math
Bond prices and yields move oppositely. If yields go up, bond prices go down.
Jack Mallers @jackmallers
Government Pressure
They're going to hammer this guy [Jerome Powell], hammer him over the top of the head.
Jack Mallers @jackmallers
Stablecoins Growth
The fastest way to grow stable coins is to grow bitcoin again.
Jack Mallers @jackmallers
Bitcoin's Role
Bitcoin will be one of the liquidity sponges. It'll be bitcoin and gold debase against a neutral asset.
Jack Mallers @jackmallers
Social Impacts
The middle of America is ruined. Rust Belt. Jobless, addicted to drugs, violence, divorce rate up.
Jack Mallers @jackmallers
US Bitcoin Holdings
I think that the US Government is ashamed of its bitcoin position... they must have discovered that they're not the leader they thought they were.
Jack Mallers @jackmallers
Company Vision
We're not here to beat the existing system. We're here to build a new one.
Jack Mallers @jackmallers
Questions & Answers
Question 1: How can you say that there isn’t any demand for 10 year treasuries, but the 10 year is only just above the overnight rate?
Answer: Jack Mallers explains that the market isn’t truly free, with limited supply issued, and testing full demand would cause dysfunction, like selling overpriced lemonade that no one buys in volume.
Question 2: Could you please explain in detail how having the price of bitcoin go up means that the price of stablecoins go up?
Answer: Jack Mallers clarifies that higher Bitcoin prices increase trading volume, boosting demand for stablecoins like Tether as the main pairing for global trades outside the US, leading to more stablecoins issued.
Question 3: Can we get a direct deposit to lateral like say 50% or whatever of my paycheck?
Answer: Jack Mallers confirms Strike supports direct deposits and plans features to allocate portions to loans or collateral, inspired by user feedback.
Question 4: What is a recent story you can share about how Strike helped someone internationally?
Answer: Jack Mallers shares how Strike’s virtual USD accounts in Colombia made it easy for users to cash out to local banks, leading to successful Bitcoin introductions with great customer service.
Question 5: How do you set up a sole proprietor account to get the business suite?
Answer: Jack Mallers advises contacting Strike’s support or private team for help, as they accept LLCs, family offices, and trusts with concierge service.
Question 6: What cold storage method do you prefer recommend?
Answer
People and Organizations Mentioned
- Jack Mallers: Host and founder of Strike and 21; discusses US economy, Bitcoin, and his companies (CEO of Strike, a Bitcoin financial firm; co-founder of 21, a Bitcoin-holding company aiming to go public).
- Jerome Powell: Federal Reserve Chair; criticized for not lowering rates, with calls for resignation amid debt issues (leads US central bank, sets interest rates).
- Donald J. Trump: Former US President; mentioned for demanding Powell’s resignation and promoting crypto via WhiteHouse.gov/crypto (45th US President, known for business and political influence).
- Secretary Besant: Likely a typo or misreference to Treasury Secretary (possibly Janet Yellen or fictional); discussed for debt tactics and crypto hype (US Treasury manages national finances; associations include fiscal policy oversight).
- Tether: Stablecoin issuer; highlighted for holding $127 billion in US treasuries and growth (inventor of stablecoins, tied to crypto exchange Bitfinex).
- Goldman Sachs: Bank partnering to digitize $7.1 trillion money market; politically aligned for stablecoins (major US investment bank, known for Wall Street influence and alumni in government).
- BNY (Bank of New York Mellon): Partnering with Goldman Sachs on digital funds; involved in transforming money markets (oldest US bank, provides custody and asset services).
- Strike: Jack’s Bitcoin financial company; updates on products like lending and bill pay (global Bitcoin app for buying, selling, and borrowing against Bitcoin).
- 21 (XXI): Jack’s co-founded company with Tether; planning public listing with Bitcoin holdings (Bitcoin-native firm, ticker XXI, focused on reshaping finance).
- Elon Musk: Retweeted a viral chart on declining marriage and homeownership; context on social impacts (CEO of Tesla and SpaceX, owner of X/Twitter, Bitcoin advocate).
- Coinbase: Crypto exchange; shareholder letter referenced for trading volumes showing Bitcoin and Tether dominance (major US crypto platform, public company NASDAQ:COIN).
- Federal Reserve (Fed): US central bank; pressured to cut rates for debt relief (controls monetary policy, independent but influenced by government).
- US Treasury: Government department; announced debt shifts, fragile market (manages US finances, issues bonds; led by Secretary Janet Yellen as of 2025 context).
- Bo Hinds: White House representative; mentioned on Bitcoin audit sensitivity (likely fictional or misnamed; associations unclear, possibly Beau Hinds or similar official).
- Coldcard: Bitcoin hardware wallet; recommended for advanced cold storage (product by Coinkite, focuses on secure, air-gapped Bitcoin signing).
- Bitkey: Bitcoin wallet; suggested for beginners (developed by Block Inc., formerly Square, led by Jack Dorsey, emphasizes user-friendly security).
Links Mentioned
WhiteHouse.gov/crypto Bitcoin Prague YouTube Channel XXI Mempool Space