Ripple CEO Garlinghouse slams Saylor's bitcoin model as STRC slides 25%

Brad Garlinghouse called Michael Saylor's leveraged bitcoin buying strategy a distraction that has damaged the broader crypto market.

Ripple CEO Brad Garlinghouse called Michael Saylor's leveraged bitcoin model financial engineering that hurt the broader market, citing Strategy's preferred stock sliding 25% below par as evidence the approach is failing.

"Financial engineering does not drive long-term value," Garlinghouse, chief executive officer of Ripple Labs, said in a CNBC interview on Friday. "Team Michael Saylor wasn't focused on the right stuff and that has hurt the overall market."

The target was Strategy's Series A Perpetual Stretch Preferred Stock (STRC), which carries an 11.5% annual dividend and is engineered to trade near $100. The shares hit a record low on Thursday, falling as much as 26% below par, as bitcoin slipped below $59,000. Strategy's common stock closed around $82 on Friday, its lowest since February 2024.

The pressure on Strategy's funding engine has intensified. CryptoQuant said in a report that the company should pause bitcoin buying and rebuild cash reserves, noting the cushion behind STRC's dividends has thinned from more than seven years of coverage to about 14 months. When STRC trades below $100, Strategy's mechanism for issuing shares to buy more bitcoin stalls — which is why the company has already paused it.

Garlinghouse separated his criticism of Strategy's approach from his view on bitcoin itself, saying he remains bullish on the largest cryptocurrency. "The long-term value of any digital asset is going to be driven by utility," he said, arguing that sustainable value comes from real-world use cases rather than capital structure optimization.

Strategy holds one of the largest corporate bitcoin treasuries globally, with an average purchase price of approximately $75,600 per bitcoin. With the token trading below that level, the company carries an unrealized paper loss of more than $13 billion. The company's market NAV stood at 0.99 as of the June 26 close, below the 1.22 threshold management has said is the minimum required for new share issuance to benefit shareholders.

Benchmark-StoneX analyst Mark Palmer argued that Strategy's funding engine has become "less efficient" rather than broken, rejecting comparisons between STRC and assets that have collapsed outright.

A Clash of Crypto Philosophies

The public dispute between two of crypto's most prominent executives highlights a deepening divide over how companies should accumulate digital assets. Garlinghouse's Ripple, which runs the XRP ledger, has focused on building payment infrastructure and enterprise partnerships rather than treasury accumulation. Saylor's Strategy, by contrast, has positioned itself as a bitcoin treasury company, using equity and preferred stock offerings to amass the token.

"If you're just trying to financial engineer and leverage and borrow more money to buy more bitcoin," Garlinghouse said, that method will not produce sustainable value.

The criticism arrives as bitcoin trades below $59,000, down from its all-time high above $73,000 set in March 2024. The broader crypto market has faced weeks of downward pressure, with traders monitoring macro data and Federal Reserve policy for directional cues.

This article is for informational purposes only and does not constitute investment advice.