Strike founder Jack Mallers: The rise in Bitcoin price is crucial for the financial stability of the United States.

Jack Mallers, the founder of Strike, stated in a video shared on the X platform that the structural rise in Bitcoin prices has become a necessary component of U.S. fiscal management. He linked the growth of stablecoins to the demand for U.S. government debt and viewed the newly launched GENIUS Act stablecoin legislation as a "historic moment for digital assets and the global dominance of the dollar." Mallers emphasized that although the legislation "has no direct relation to Bitcoin," he believes the expansion of stablecoins is closely related to the appreciation of Bitcoin.

The rise of Bitcoin and gold is key to avoiding a U.S. fiscal crisis

Mallers presented a comparison chart of Tether's market capitalization and Bitcoin prices, telling the audience: "The green is Tether's market cap, the orange is Bitcoin... The largest trading volume in this asset class is USDT, Tether... If you want stablecoins to rise, Bitcoin also needs to rise." He further linked this relationship to federal financing, pointing out that stablecoin issuers, especially Tether, hold a large amount of U.S. Treasury bonds. Therefore, the increase in stablecoin market capitalization will translate into structural demand for U.S. debt.

Mallers described the U.S. Treasury as "in trouble" and stated: "We know that the U.S. cannot raise interest rates and cannot cut spending. So we are in trouble, and the logical next step is that we need to devalue the dollar. This is the only way out." The question he raised is: against which assets should the dollar be devalued? He suggested: "Don't tie the devaluation of the dollar to housing or eggs... My suggestion is to devalue the dollar against Bitcoin and gold."

The Potential for Bitcoin to Rise to $500,000: Driving Stablecoin Growth and Demand for U.S. Debt

Mallers predicts that if the price of Bitcoin reaches $500,000 (which is 5 times the current price), this will force the market capitalization of stablecoins to "rise 5 times", leading to a "5-fold increase in demand for U.S. debt". He stated that traditional foreign and domestic buyers are already feeling fatigued: "China doesn't want to buy your debt... hedge funds don't want it either. So who is the last buyer? The Federal Reserve."

He likened the potential docking of the financing needs of U.S. Treasury securities, the expansion of the Federal Reserve's balance sheet, and the composition of stablecoin reserves to a similar event in history: "The last time the Federal Reserve 'married' the U.S. government was to help finance expenditures during World War II. At that time, the Federal Reserve's balance sheet grew by 10 times, mainly by purchasing... treasury bills, while stablecoins also bought these bonds."

The U.S. debt-to-GDP ratio has reached 130%, and it needs to be addressed through currency devaluation

When discussing the U.S. debt to GDP ratio reaching 130%, Mallers believes that actual debt must be reduced through currency devaluation, and that this devaluation should be directed towards politically acceptable asset inflation. He also extends this view into the political realm, noting: "The president and his family have just purchased $2 billion worth of Bitcoin" and policy measures such as opening "the U.S. retirement market to invest in cryptocurrency."

Mallers stated that incorporating Bitcoin and gold into retirement accounts would enable policymakers to "devalue the dollar and get re-elected" because Bitcoin holders would not oppose the decline in purchasing power: "Even though you want to devalue the dollar, I don't care because I own Bitcoin."

Conclusion

Mallers summarized that he believes the mechanisms presented in the bill are very clear: "stablecoins are a new way for the government to finance itself, but they grow with Bitcoin. One way to grow stablecoins is to grow Bitcoin... One way to address the issues of the Federal Reserve and the Treasury is to grow Bitcoin, and this is self-evident."