CoinDesk
Ripple CEO Brad Garlinghouse said he remains bullish on bitcoin, but argued in a Friday CNBC interview that Michael Saylor's preferred-share funding model for buying the token has actively damaged the broader crypto market. His target was Strategy's STRC preferred, an 11.5% dividend instrument engineered to trade near $100, which fell as much as 26% below par to a record low on Thursday as bitcoin slipped under $59,000.
"Financial engineering does not drive long-term value," Garlinghouse said, arguing that lasting worth in any digital asset comes from its usefulness. He pointed to STRC trading roughly 25% below its $100 anchor as a "damning indictment" of the strategy, and said the team behind it "wasn't focused on the right stuff." The criticism lands on a week of mounting pressure across Strategy's capital stack, with common stock closing around $82 on Friday, its lowest level since February 2024.
Why it matters
The line Garlinghouse drew is between bitcoin the asset and the corporate machine built on top of it. He is still long the token; he is short the financing. That distinction matters because Strategy's preferred-stock program has been a major marginal buyer of bitcoin for roughly a year, and a stalling engine removes a steady bid from the market at exactly the moment the underlying asset is retesting support below $59,000.
CryptoQuant made the same point in a report this week, arguing Strategy should pause buying and rebuild cash, noting the dividend-coverage cushion behind STRC has thinned from more than seven years to about 14 months. Benchmark-StoneX analyst Mark Palmer pushed back, calling the funding engine "less efficient" rather than broken, and rejecting comparisons to assets that have collapsed outright.
Market impact
The mechanics are straightforward: when STRC trades below $100, Strategy's loop of issuing shares and buying bitcoin stalls, which is why the company has already paused it. A paused issuance removes a structural source of demand right as price action is weakest, and Garlinghouse's public criticism puts a high-profile voice on the bearish side of the framing at the same moment the engine is freezing.
Frequently asked questions
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What did Ripple's CEO actually say about bitcoin and Strategy?
Brad Garlinghouse said he remains bullish on bitcoin, but called Michael Saylor's preferred-share funding model "financial engineering" that has damaged the broader crypto market, citing STRC's slide to a record low as evidence.
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Why is Strategy's STRC preferred stock at the center of the debate?
STRC carries an 11.5% annual dividend and is engineered to trade near $100. It fell as much as 26% below par to a record low on Thursday, signaling strain on Strategy's capital stack as bitcoin slipped under $59,000.
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What happens to bitcoin demand if Strategy's funding engine stalls?
Strategy has used preferred-share issuance to fund bitcoin buys for about a year. When STRC trades below $100, the issuance-and-buyback loop stalls, and the company has already paused it, removing a structural source of marginal demand.
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Did any analysts defend Strategy's model?
Yes. Benchmark-StoneX analyst Mark Palmer called the engine "less efficient" rather than broken, and rejected comparisons to instruments that have collapsed outright. CryptoQuant took the opposite view, recommending Strategy pause buying.
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What did CryptoQuant say about the dividend coverage behind STRC?
CryptoQuant said the dividend-coverage cushion behind STRC has thinned from more than seven years to about 14 months, and recommended that Strategy pause bitcoin buying to rebuild its cash reserves.
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