Jack Maller's Bitcoin payments app Strike is moving into the crypto lending business

Strike, the Bitcoin Lightning-based payments app founded by Jack Mallers, has unveiled a new crypto lending program, according to an announcement on Tuesday. The lending facility will be available for individual users and corporate accounts.

“You shouldn’t have to sell the best-performing asset in human history to access cash. Now you don't have to. Access your bitcoin wealth without selling it,” Mallers, who was recently named chief executive officer of the Tether-backed Strategy rival Twenty One Capital, wrote on X.

Strike Lending, initially available in select regions in the U.S. with plans to expand internationally, is the latest crypto credit program to hit the markets during a bounce back for the industry. Many centralized players, like Coinbase and Xapo, have begun to roll out new and expand existing lending programs amid a strengthening market.

Crypto lending took a hit during the market pullback in 2022, with many major players, including BlockFi, Celsius, and Genesis, ultimately declaring bankruptcy. According to a recent Galaxy Research report, today’s crypto credit market is down 43% from the all-time high of $64.4 billion set in the fourth quarter of 2021, with a majority of the activity happening on decentralized lending protocols.

The top three CeFi lenders — Tether, Galaxy, and Ledn — account for a total loan book size of $9.9 billion as of the fourth quarter 2024. "Together, they make up 88.6% of the CeFi lending market and 27% of the total crypto lending market including crypto-backed CDP stablecoins," Galaxy’s Zack Pokorny wrote. 

Crypto lending enables users to borrow cash or stablecoins using digital assets as collateral. These assets are then typically used to fund investments that earn the lender revenue. Collateral requirements are determined by the loan-to-value (LTV) ratio – i.e., the size of the loan compared to the collateral’s nominal value.

"To offer competitive rates and terms, Strike partners with carefully selected capital providers," Strike said in an FAQ. "By opening a loan, you authorize Strike to transfer your bitcoin to a trusted third-party capital provider for the duration of the loan. These partners are thoroughly vetted, and Strike remains legally responsible for your collateral at all times."

Strike Lending will offer 12-month loans starting at a minimum of $75,000 and capped at $2 million with an interest rate of at least 12% APR. Users can opt to either pay off the loan monthly or close out the accrued interest and principal at maturity. There will be 0% origination fees and 0% early-repayment fees. Additionally, the company says, these bitcoin-backed loans "are not reported to credit agencies and do not affect credit scores."

"If #bitcoin continues to grow faster than your borrowing costs, your asset appreciates faster than your debt. In other words, the gains from holding bitcoin can more than offset the interest on your loan," Mallers wrote. 

The onchain lending sector on Ethereum alone is valued at over $34 billion, according to The Block's data dashboard.