Ripple CEO Brad Garlinghouse criticized Strategy Chairman Michael Saylor’s Bitcoin accumulation model, saying the company’s reliance on financing structures to fund BTC purchases has added pressure to the broader crypto market.
Garlinghouse made the comments during an interview with CNBC, where he said long-term value in digital assets should come from utility rather than financial engineering. He also said he remains bullish on Bitcoin, while arguing that Strategy’s approach has created market stress during the latest downturn.
His remarks came as Bitcoin rose above $60,000, and Strategy’s preferred shares remained under pressure. Garlinghouse pointed to Strategy’s STRC preferred stock trading about 25% below its $100 par value as evidence that the company’s funding model has faced strain.
Garlinghouse Criticizes Strategy’s Bitcoin Funding Model
Garlinghouse said financial engineering does not create long-term value and that digital assets need real utility, customer demand, liquidity, and trust to support durable market growth. He said Strategy’s Bitcoin buying model added excitement during rising markets but has also increased pressure during falling markets.
Strategy has used preferred securities, including STRC, to raise capital for additional Bitcoin purchases. STRC carries an 11.5% annual cumulative dividend and was structured to trade near its $100 par value.
Garlinghouse described STRC’s fall below par as a negative signal for Strategy’s approach. He said the decline reflected weakness in a model that depends on continued investor demand for capital instruments connected to Bitcoin accumulation.
The Ripple CEO said his criticism was directed at Strategy’s capital structure rather than Bitcoin itself. He repeated that he is bullish on Bitcoin and cited the view that market downturns can create opportunities for long-term investors.
STRC Weakness Adds Pressure on Strategy
STRC recently traded about 25% below its $100 par value, while Strategy’s common shares also came under pressure as Bitcoin fell. The decline raised questions about the company’s ability to continue raising capital through preferred shares while those instruments trade at a discount.
Preferred share issuance can support Bitcoin purchases when investor demand is strong and the securities trade near or above par. When they fall sharply below par, the same structure becomes harder to use without creating less favorable terms for the company.
CryptoQuant said this week that Strategy should pause Bitcoin purchases and rebuild its cash reserves. The firm cited pressure on dividend coverage and reduced flexibility as Bitcoin prices weakened.
Strategy’s model has been closely tied to market confidence in both Bitcoin and the company’s securities. If Bitcoin declines and preferred shares fall below par, the company may face tighter conditions for raising new funds while still carrying dividend obligations.
Ripple CEO Calls Bitcoin Digital Gold
Despite criticizing Strategy, Garlinghouse said Bitcoin has established a clear position as digital gold. He compared Bitcoin’s transferability with gold, saying large amounts of BTC can be moved more efficiently than physical gold across jurisdictions.
Garlinghouse also discussed Ripple’s focus on XRP and institutional payments. He said XRP’s utility is tied to payment speed and blockchain efficiency for financial institutions.
According to Garlinghouse, Ripple processed about $16 trillion in payments through its prime brokerage business last year, partly through acquisitions, while only a small share involved digital assets. He said the opportunity lies in bringing more traditional finance activity into digital asset settlement.
His comments reflect a broader debate in crypto markets over whether digital asset valuations should be driven by treasury accumulation, yield products, payment utility, decentralized finance usage, or institutional adoption.
Strategy has continued to describe Bitcoin as the central focus of its long-term capital allocation plan. Saylor recently said volatility tests every capital structure and that Strategy remains focused on Bitcoin, disciplined capital allocation, credit quality, and long-term value creation. Concurrently, earlier today, he posted on X that “Bitcoin is working today. So are we.”
