Jack Mallers' Strike launches 'volatility-proof' bitcoin loans built to protect against liquidation

Jack Mallers' Strike has launched a new bitcoin-backed lending product that allows borrowers to avoid forced liquidation regardless of how far the price of bitcoin falls, provided they continue making payments.

"No margin calls. No price liquidations. No matter how far bitcoin falls, your bitcoin doesn't move," Mallers, Strike's founder and CEO, said. "Volatility is inevitable. Liquidation isn't. Borrow dollars. Keep the bitcoin."

Strike said the new product forgoes "price-triggered" actions tied to loan-to-value ratios, so borrowers don't have to worry about margin calls or automatic liquidations if the price of bitcoin falls. Users' collateral remains "untouched" as long as payments are kept current.

Collateral can be partially liquidated, however, if a borrower misses an interest or maturity payment and fails to pay within a 10-day grace period, Strike said. The loans are available for term loans in select U.S. states, but not for lines of credit.

Strike's launch of the price-protected bitcoin loans comes amid a bearish market for BTC. After several weeks of volatility and decline, the price of bitcoin (BTC) rebounded slightly in recent days to trade around $63,000 on Tuesday.

Strike allows users to buy and sell bitcoin via bank accounts, debit cards, or wire transfers and provides services such as automated recurring purchases and price-triggered orders. The company also lets users convert a percentage of direct-deposited paychecks into BTC and pay bills using their bitcoin.