Jack Mallers. Source: Bloomberg
Strike CEO Jack Mallers believes Bitcoin is primed to pump following the Federal Reserve’s $300 billion injection into the banking sector last week.
Mallers predicts that the US dollar is entering a new era of persistently high inflation, which will only benefit Bitcoin.
Speaking with CNBC, co-anchor Kelly Evans asked the CEO why people should expect Bitcoin to moonshot following banking crisis, the likes of which have historically been deflationary periods. She cited former Coinbase CTO Balaji Srinivasan, who predicted last week that the dollar would hyperinflate and send Bitcoin to $1 million within the next 90 days.
Mallers’s argument was simple: Bitcoin is a fixed supply money, whereas the dollar is not, meaning Bitcoin will appreciate against dollars as more of the latter enters circulation.
“Money printer is going brr,” he said. “The only thing that’s clear to us, and clear to our customers, is that you cannot hold and save in dollars anymore.”
The Federal Reserve backstopped banks with $300 billion as part of its new Bank Term Funding Program last week, erasing half of the progress it had made in shrinking its balance sheet over the past year. The central bank has been attempting to quell persistently high inflation, which reached a high of 9.1% in June, back to its target 2% rate.
Though inflation remains hot at 6%, markets have already shortened their timeframe on when they expect the Fed to start cutting rates from Q1 2024 to June 2023. According to Mallers, inflation within the 5-10% range will now be normalized.
“They have to backstop these things with new money,” he continued, referring to banks struggling in the wake of Silicon Valley Bank (SVB)’s collapse. “You’re seeing scarce assets, risk-on assets actually be big winners here.”
BitMEX co-founder Arthur Hayes published a blog post last Thursday offering similar predictions, stating the Fed’s new program will usher in “infinite money printing.”
Besides Hayes and Mallers, on-chain analytics firm Glassnode has noted key on-chain indicators that Bitcoin has returned to the early-bull market territory.
Over 122,000 new Bitcoin entities were created each day last week, an amount greater than 90% of days in Bitcoin’s history. Meanwhile, transactions reached a total of 309,500 per day – a sign that investor activity is increasing.
“Few longer-term investors appear to be motivated to take profits into this rally, signaling a remarkable strength, and a reflection of the beliefs held about Bitcoin’s important role in the future of the global financial system,” added Glassnode.
Featured Image Courtesy of Bloomberg.