Jack Mallers explores the shift from failing bonds to Bitcoin, Chicago's financial crisis, and updates on his companies Strike and 21 in this insightful podcast episode.
Timestamp Overview
[00:00:00 - 00:05:00] Introduction to the Episode
- Jack Mallers welcomes listeners to Mailbag Monday on The Jack Mallers Show, sharing the current Bitcoin price and block height.
- He explains the show’s format: a long rant on macro news and Bitcoin thoughts, updates on his companies, and Q&A.
- Jack expresses excitement about the episode’s topic, “From Bonds to Bitcoin: The Rules of Money Are Changing,” and thanks subscribers for their support.
[00:05:00 - 00:12:00] The Decline of Bonds
- Jack discusses how bonds, once a safe place to store wealth, have lost value for five years straight, worse than ever before.
- He shares a tweet showing bonds behaving like risky, low-volume investments with little real demand.
- Jack argues that the traditional way people and countries save money in bonds is failing, leading to a new era where Bitcoin could take over.
[00:12:00 - 00:20:00] Chicago’s Financial Crisis
- Jack describes Chicago’s massive budget shortfalls in public transport, schools, and pensions, making the city hard to live in safely.
- He explains how underfunded pensions for police, firefighters, and teachers are worsening due to poor investments.
- Jack humanizes the issue by sharing his personal connection to Chicago, noting how crime and poor services stem from these money problems.
[00:20:00 - 00:27:00] How Bad Investments Hurt Cities
- Jack breaks down Chicago’s problems: over-promised pensions without enough saved money, and investments in losing assets like bonds and real estate.
- He illustrates a “doom loop” where falling property values mean less tax money, creating bigger deficits that hurt services like schools and safety.
- Jack criticizes the mayor’s plan to tax the rich more, saying it drives people and businesses away, making things worse.
[00:27:00 - 00:35:00] Shifting to Bitcoin as a Solution
- Jack plays a clip from Treasury Secretary Scott Bessent about supporting digital assets like Bitcoin under the new administration.
- He highlights Trump’s executive order allowing Bitcoin and gold in retirement accounts to save failing portfolios.
- Jack points to Harvard buying over $100 million in Bitcoin as proof that big institutions see it as a better way to protect wealth.
[00:35:00 - 00:42:00] Why Traditional Investments Are Failing
- Jack shows data proving bonds and most stocks underperform compared to Bitcoin and gold in real terms.
- He explains how the stock market’s gains are mostly from a few big companies, while the rest barely keep up with rising prices.
- Jack argues that owning Bitcoin is the smartest way to save because it’s scarce and outperforms everything else.
[00:42:00 - 00:49:00] Broader Economic Changes
- Jack discusses government plans like revaluing gold to buy Bitcoin and injecting money into markets through big sales.
- He predicts huge Bitcoin price growth due to more money printing and people moving savings into it.
- Jack shares his frustration with Chicago’s decline but says Bitcoin could fix these issues if adopted.
[00:49:00 - 00:57:00] Updates on Strike
- Jack announces new features for Strike, like business bill pay, support for Australian dollars, and Bitcoin-backed loans in more countries.
- He highlights cost basis tracking to help users see their Bitcoin gains easily.
- Jack emphasizes Strike’s security, low fees, and growth, thanking users for their support.
[00:57:00 - 01:05:00] Updates on 21 and Bitcoin Thoughts
- Jack gives a brief update on his company 21, in a quiet period awaiting approval, with billions in Bitcoin held.
- He responds to a tweet worrying about governments buying Bitcoin, explaining it’s actually good because Bitcoin protects against money printing.
- Jack reassures that Bitcoin stays decentralized and no one, not even governments, can control it all.
[01:05:00 - 01:15:00] Q&A and Closing
- Jack answers listener questions on topics like Bitcoin in retirement accounts and the importance of trustless money.
- He explains simple concepts like why Bitcoin doesn’t need permission to use, unlike dollars.
- Jack thanks listeners for their support, shares his gratitude, and ends by encouraging everyone to stay humble and save in Bitcoin.
Notable Quotes
Bonds Decline
Bonds have been getting obliterated, scoreboard. Last five years, bonds have been getting smoked, destroyed.
Jack Mallers @jackmallers
Chicago Crisis
This city has gone to shit. My hometown, fuck, this episode's gonna pain me.
Jack Mallers @jackmallers
Pension Problems
For every dollar that comes in, you take 70 cents and you fund your firefighters, your policemen.
Jack Mallers @jackmallers
Bitcoin Solution
If Chicago had been staying humble and stacking sats since I told them to 13 years ago, we'd have no crime and no problems.
Jack Mallers @jackmallers
Portfolio Shift
The 60-40 portfolio is dead. Absolutely dead. You have to find room for Bitcoin.
Jack Mallers @jackmallers
Stock Market Reality
In real terms, stocks are getting murdered.
Jack Mallers @jackmallers
Government Support
The government is going to support Bitcoin as a liquidity escape valve.
Jack Mallers @jackmallers
Bitcoin Simplicity
When you understand Bitcoin it's not 1% of your portfolio.
Jack Mallers @jackmallers
Gratitude
I just feel like the luckiest man in the world sometimes.
Jack Mallers @jackmallers
Bitcoin Fear
This guy's bitcoin fear is that bitcoin is going to protect his purchasing power against infinite amounts of dollars printed.
Jack Mallers @jackmallers
Questions & Answers
Question 1: Don’t you think it’ll be 12 to 18 months before we see any actual diversification into Bitcoin?
Answer: Jack Mallers agrees it may take time for real changes but emphasizes that markets price future expectations, making the executive order a big step toward saving failing savings accounts with Bitcoin.
Question 2: Can you explain the importance of trustless money compared to money that needs trust to operate?
Answer: Jack Mallers explains that Bitcoin is trustless because its rules can’t change and no permission is needed to save or spend it, unlike dollars which rely on banks, governments, and unclear policies that can debase value.
Question 3: The CEP Bitcoin per share is notably higher than MicroStrategy. Will that last?
Answer: Jack Mallers cannot comment on CEP due to his role at 21 and ongoing regulatory processes, stressing respect for the quiet period.
Question 4: Are you going to have a renew button to roll over the loan?
Answer: Jack Mallers confirms a refinance or renew feature is coming soon for Strike loans, allowing users to extend without closing, based on his own use of borrowing against Bitcoin.
Question 5: When can we expect rates to go down?
Answer: Jack Mallers says Strike’s loan rates depend on cheaper capital sources like banks and will likely drop as broader interest rates fall, noting current rates match home equity loans.
Question 6: Lower entry loans like 5k anytime soon?
Answer: Jack Mallers notes 5k minimums are already in some markets but U.S. regulations prevent smaller loans in certain states to protect consumers, though it’s not his preference.
Question 7: Why do we need to sign up for a business account?
Answer: Jack Mallers directs to Strike’s FAQ, explaining it’s for regulatory compliance like collecting basic business info, which is quick and standard.
Question 8: Does Strike back every bitcoin purchase at the exchange for those who choose not to pull it off the exchange to take a loan?
Answer: Jack Mallers assures all Bitcoin on Strike is backed one-to-one, with loans overcollateralized, and the platform holds more assets than liabilities without any rehypothecation.
Question 9: Does Strike have any plans to integrate with BitKey?
Answer: Jack Mallers hints at upcoming integration for automatic Bitcoin withdrawals to BitKey but can’t disclose details yet due to Block being public.
People and Organizations Mentioned
- Jack Mallers: Host of the podcast, CEO of Strike and co-founder of 21; discusses Bitcoin, bonds, and Chicago’s finances; known as a prominent Bitcoin advocate and entrepreneur (https://strike.me).
- Charlie Bilello: Mentioned for a tweet on the US bond market’s long drawdown; Chief Market Strategist at Creative Planning, focuses on financial markets and data analysis.
- Lynn Alden: Quoted on why bonds trade like illiquid assets; macroeconomic strategist and author, known for Bitcoin and monetary policy insights (https://www.lynalden.com).
- Brandon Johnson: Chicago’s mayor, criticized for handling budget shortfalls and proposing taxes; current Mayor of Chicago, focused on progressive policies.
- John Catanzara: Fraternal Order of Police president, quoted on pension benefits; leader of Chicago’s police union, advocates for officers’ rights.
- Scott Bessent: Treasury Secretary, clip played supporting digital assets; nominee for U.S. Treasury Secretary under Trump, hedge fund manager with economic policy focus.
- Donald Trump: Referenced for executive order on Bitcoin in 401ks and letter to Jerome Powell; former U.S. President, now influencing Bitcoin policy through orders.
- Jerome Powell: Recipient of Trump’s letter on rates; Chair of the Federal Reserve, oversees U.S. monetary policy.
- Michael Saylor: Implied in context of world reserve assets; CEO of MicroStrategy, major Bitcoin holder and advocate (https://strategy.com).
- Satoshi Nakamoto: Bitcoin’s creator, referenced in a tweet about government co-opting Bitcoin; pseudonymous inventor of Bitcoin, emphasized decentralization.
- Scottie Pippen: Former NBA player, discussed running for mayor with Jack; Chicago Bulls legend, six-time NBA champion with Michael Jordan.
- Michael Jordan: Mentioned as Chicago icon; NBA legend, associated with Chicago Bulls and city’s sports heritage.
- Oprah Winfrey: Referenced in Chicago’s past vibrancy; media mogul and philanthropist, based in Chicago for her show.
- Elon Musk: Implied in government austerity talk; CEO of Tesla and SpaceX, involved in Trump’s administration for efficiency.
- Strike: Jack’s company, updates on features like loans and bill pay; Bitcoin financial platform for buying, lending, and payments (https://strike.me).
- 21 (XXI or Twenty One): Jack’s company with Tether, in quiet period; Bitcoin-focused firm aiming for public listing, holds significant Bitcoin reserves (https://xxi.money).
- Tether: Co-founder of 21; issuer of USDT stablecoin, major player in crypto with Bitcoin investments (https://tether.to).
- SoftBank: Investor in 21; global venture capital firm, known for tech investments including crypto-related projects.
- Harvard University: Bought $100 million in Bitcoin; prestigious U.S. university with a large endowment shifting to Bitcoin for preservation.
- MicroStrategy: Compared in Bitcoin holdings; public company led by Michael Saylor, largest corporate Bitcoin holder (https://strategy.com).
- Fannie Mae and Freddie Mac: Government plans to IPO them; U.S. government-sponsored enterprises for housing finance, to inject market liquidity.
- Federal Reserve (Fed): Published on gold revaluation; U.S. central bank, manages monetary policy and discussed Bitcoin indirectly.
- Chicago Board of Trade: Jack’s grandfather was chairman; historic commodities exchange, now part of CME Group, pioneered risk transfer.
- University of Chicago, University of Illinois, Northwestern: Mentioned as local schools with endowments; top U.S. universities, potentially affected by pension issues.
- Bank of America, Chase, Citigroup: No longer major U.S. bond buyers; large U.S. banks involved in traditional finance.
- China, Russia: Former major U.S. bond holders; countries reducing U.S. debt holdings amid geopolitical shifts.
- Block (BitKey): Potential integration with Strike; company behind BitKey wallet, focused on Bitcoin self-custody (https://bitkey.world).