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- Strike’s new volatility-proof loan Bitcoin change the value of the risk for borrowers to capital lending.
- Tether provides a $2.1 billion loan behind the program and creates its own lending system.
- The proposed merger will bring Strike, Twenty One Capital, and Elektron Energy mining into a single platform connected to Tether.
- The merger covers all banking activities except securities managed by banks.
This week’s headline is about Strike. On July 7, the company launched a Bitcoin-backed loan without edge calls and no liquidations cost, promising that the collateral remains unaffected no matter how far Bitcoin falls, as long as the borrower continues to pay. Most of the publicity stopped there. The most followed issue is the bottom, the most vulnerable group. A default in value means that one owes a minimum of each repayment, and that the other, directly or indirectly, is Tether. Merger sentiment from April was counted as the industry’s driving force at the time. Yesterday’s launch is what it looks like in the making: a stablecoin provider bringing together deposits, loans, energy, mining, and capital markets into a bank that works for the Bitcoin economy. No banking license. There is no big bank behind it. There is no deposit insurance in front of it.
Credit Strike sells, the risk that Tether holds
Strike’s stability-enhancing design only works with deep pockets on the back. Borrower sends $100,000 in BTC on 45% of the loan on the value of the property and they take 45,000 dollars. If Bitcoin falls 60% and stays there, the collateral covers about $40,000 against a $45,000 loan. A common crypto lender would be sold at 85% LTV. This one waits, holding the deficit until repayment or maturity.
That patience is good on paper, and the delivery page is not Strike. Jack Mallers announced a $2.1 billion loan that he said would give the company the ability to meet demand in any form, and Tether also created a default lending system. Even Strike’s proof-of-reserves system, which allows the borrower to verify collateral at a separate address on the chain, was built with Tether support. Beating starts with work. Tether reduces tail risk. Traditional finance has a name for this field of activity: the originator of the model, the same mortgage bankers run together with those who rent warehouses.
Six of the seven banking services, which have already been established
Take the high-profile commercial banking services and compare them against what Tether is currently about. Opportunities are limited.
| Banking services | Type of Tether | Scale |
|---|---|---|
| Deposits | USDT round | The lowest price of Stablecoin shares |
| Borrowing | Your CeFi loan guide + Beat the loan | $2.1B property; CeFi’s top-3 lender |
| Payment & retention | Hit (requested agreement) | 95+ countries |
| Reserves / Treasury | Twenty One Capital BTC Treasury | Top BTC workers |
| Physical infrastructure | Elektron Energy mining (combination required) | ~50 EH/s, ~5% of network hashrate |
| Major markets | Arm protection arrangement | A loan for a loan is a mining investment |
| Lender of last resort | There is none | – |
Tether Investments published the proposal combining Twenty One Capital with Strike and Elektron Energy, a miner that manages about 50 EH/s, about 5% of the Bitcoin network hashrate, in a single named platform combining wealth, mining, financial services, lending, and capital markets. Mallers agreed from the stage of Bitcoin 2026. “In short, I think it’s a great idea,” he said, adding that his founding goal was always a Bitcoin company and not a payment program.
The terms and timing remain unknown, but the machine is moving: in June, Tether appointed an independent director to the XXI organization to restore the audit committee to the SEC and NYSE independent standards, a type of housing that leads to sales, not those that follow death.
Mallers described the service as built around loan bookkeeping, mining deposits, Bitcoin-backed loans, and structured products. Placing loans in businesses and selling them in the future is how banks refinance and lend through their balance sheets. No one in crypto has driven the machine through its growth. Tether-Strike’s combined team would be the first to have a volume start-up and test distribution.
Three lenders now have 89% of the market that used to have ten
The crypto credit market recovered from 2022 with few players. According to Galaxy Research data, the three largest centralized lenders, Tether among them along with Galaxy and Ledn, have a combined loan book of $9.9 billion, about 89% of the CeFi lending market. Tether sits at the top of the pack with its ledger, and now also funds the industry’s most aggressive developer through Strike.
The time before the fall looked different. Celsius, BlockFi, Voyager, and Genesis competed with the same lenders, and when they collapsed, the survivors took customers and the market continued to operate. The 2026 market has no such need. One major creditor is now behind the deposits (USDT), the tradeable loan (Strike facility), and soon, after the merger, an important part of the mining equipment that protects the network itself. Bank managers have the tenure of an organization whose failure permeates every part of its system. Crypto has grown quietly without anyone signing on.
To be fair on the other side of the ledger: Tether reports billions of annual profits from the stored yield, which gives it the power to lose more than the crypto rent 2022 has ever been. The company can afford to stay on underwater debt through a bear market. This is what makes the promise of no cancellation so credible today. It is also what makes the system fragile in situations where it is needed. The shocks that hit Tether itself, whether from reserves, regulations, or forced redemptions, now spread simultaneously across stablecoin markets, CeFi’s loan book, Strike lenders, and mining fleets. Banks have deposit insurance and interbank payment lines for this problem. This design holds everything.
Ledn and Unchained are now missing $2 billion behind them
For borrowers, none of this is visible. Loans are accepted, Bitcoin remains, and the plumbing behind the $2.1 billion does not appear in the program. The market feels differently. Competing lenders like Ledn and Unchained still run LTV discount models, and matching Strike’s non-discharge terms would require a larger partner willing to eat less in years, not hours. A select few are available. The result is a consolidation of everyone with the biggest savings, which is the opposite of what the market still wants by 2022.
The Bitcoin price mechanism also changes. Forced foreclosures have fueled the biggest sell-off since 2018 by dumping collateral on the exchange during a critical period. Loans that do not sell at value eliminate one of the duplicates. The sales momentum is never ending; it turns into credit exposure to be on Tether-linked pages, waiting.
The open question falls on control desks, not commercial monitors. US stablecoin regulations focus on equity and redemption rights, not what the issuer does with its profits. The lending of billions against defaulted collateral through joint platforms is outside the scope of the rest, and European regulators under MiCA are facing the same gap. Merger wants, who will put the Elektron founder Raphael Zagury in the chair of the president of the organization referred to as a combination of all these pieces, in the end will force a decision: at a time when Bitcoin is the largest asset of private debt to be under something similar to the supervision of a bank, and who moves first, Washington or Brussels?
