Jack Mallers says Bitcoin's bear market has left him "getting my ass kicked," but the founder of Bitcoin payments app Strike believes that is precisely what distinguishes the asset from traditional financial systems.

In an essay published Friday, just days after stepping down as CEO of Twenty One Capital — a Bitcoin treasury company formed through a merger involving Cantor Fitzgerald, Tether, and Bitfinex — Mallers argued that Bitcoin's painful downturns expose reality rather than conceal it.

Bitcoin's Pain Has a Purpose

Mallers wrote that he originally drafted the essay on July 11, before resigning from Twenty One Capital, with the intention of publishing it the following Monday. That plan changed when he was told to wait until his departure became public.

In the essay's opening note, he acknowledged that the company he believed he was building and the direction it ultimately took "were no longer the same," prompting him to step away. He also accepted responsibility for helping create expectations that "were not ultimately fulfilled," while clarifying that the essay was not meant as a defense of his decision.

His departure marked a swift exit from a venture that had drawn significant attention across the Bitcoin industry, given the involvement of major crypto and traditional finance players in its formation.

Instead, Mallers used Bitcoin's latest bear market as a lens through which to examine leadership, conviction, and failure. Although BTC is trading nearly 50% below its all-time high, he argued that the emotional toll extends far beyond financial losses.

"I am not writing this from the peaceful other side of the storm," he wrote. "I am still in it."

Drawing a contrast with traditional finance, Mallers said governments, banks, and institutions frequently soften the consequences of poor decisions through interventions such as bailouts and refinancing. Bitcoin, by comparison, refuses to do that.

"The world I am used to keeps trying to protect me from the lesson," he noted. "Bitcoin does not."

He described volatility as information rather than weakness, maintaining that price swings expose excessive leverage, poor decisions, and fragile business models instead of hiding them.

Bear Markets Expose Weakness, They Don't Create It

Looking back at the collapse of FTX in 2022, the former Twenty One CEO contended that BTC did not create the fraud — the bear market simply removed the conditions that had allowed weak businesses and unsustainable leverage to persist.

He also admitted that previous bull markets had shaped his own behavior. Reflecting on product announcements made during the 2022 Bitcoin Conference in Miami, Mallers wrote that he had started confusing "attention for proof of work" and "vision for execution," calling the admission one of the hardest sentences he had ever written.

His resignation from Twenty One became another example of that same lesson. While declining to explain every detail behind his departure, Mallers said the experience forced him to test whether the principles he had spoken about publicly were genuine when faced with easier alternatives.

His comments come amid ongoing debate over whether Bitcoin's bear market has already bottomed out. Some analysts, including those from Grayscale, argue that macroeconomic conditions matter more now than the classic four-year halving cycle. Others, however, still anticipate one final dip before a sustained recovery.

Mallers did not spend significant time predicting prices. His argument was simpler: the discomfort of a bear market is precisely what keeps Bitcoin honest.