Ripple CEO Brad Garlinghouse Slams Michael Saylor For Using STRC To Buy Bitcoin

On Friday, Ripple CEO Brad Garlinghouse spoke out against the Bitcoin acquisition tactics of Strategy Chairman Michael Saylor. In a criticism, Garlinghouse highlighted the company’s preference for preferred stock sales like STRC to fund further BTC purchases.

Ripple CEO Brad Garlinghouse Criticizes Michael Saylor’s Bitcoin Strategy

In an interview with CNBC, Garlinghouse asked about the sustainability of the financing model for providing value for investors with Strategy. “Financial engineering does not drive long-term value … long-term value of any digital asset is going to be driven by utility,” the Ripple CEO said.

He also said that Strategy’s approach has major implications for the crypto market. “Team Michael Saylor wasn’t focused on the right stuff and that has hurt the overall market,” Garlinghouse said.

The remarks followed Bitcoin’s price dropping slightly below $60,000 on Friday. Though he took potshots at Strategy’s financial structure, Ripple CEO Garlinghouse stated he’s still bullish about Bitcoin.

Garlinghouse highlighted Strategy’s STRC preferred shares, which are around 25% down from their face value of $100. He said the drop was a “damning indictment” of Strategy’s model of funding its purchases of more Bitcoin.

For context, Strategy has been selling preferred securities, such as STRC, for about a year, to finance further BTC purchases. The STRC also has a cumulative annual dividend obligation of 11.5% on its shares, which means that the company has an ongoing financial obligation to pay dividends on its shares.

MSTR, STRC, BTC Continue Dropping

The criticism comes as capital structure of Strategy comes under increasing scrutiny. CryptoQuant, an on-chain analytics firm, earlier this week recommended that it stop more purchases of Bitcoin and build up cash reserves.

This week saw a further increase in pressure on Strategy’s securities given the continued decline in bitcoin’s price. On Thursday STRC touched a new low as it traded at as much as 26% below $100 par value. The common stock of Strategy, MSTR, dipped to its lowest since February 2024 as Bitcoin fell to about $58,000.

The MSTR stock has seen its losses continue to grow on Friday, closing around $82. Hence, investors are still trying to gauge the company’s leveraged Bitcoin accumulation technique.