Ripple's Garlinghouse Backs Bitcoin But Slams Saylor's Preferred Stock Strategy as Market Damage

Ripple CEO Brad Garlinghouse has reaffirmed his confidence in bitcoin as a long-term asset, but he isn't holding back when it comes to Michael Saylor's fundraising tactics. In a Friday appearance on CNBC, Garlinghouse argued that Strategy's preferred-share model for accumulating bitcoin has inflicted real damage on the broader crypto ecosystem — and he pointed to crumbling share prices as proof.

"Financial engineering does not drive long-term value," Garlinghouse stated plainly during the interview. In his view, the enduring worth of any digital asset is rooted in its practical utility, not in complex capital structures. "Team Michael Saylor wasn't focused on the right stuff, and that has hurt the overall market," he added, while making clear that his criticism targets the mechanism — not bitcoin itself.

At the heart of Garlinghouse's concerns is Strategy's STRC preferred stock. Engineered to trade near $100 and carrying an 11.5% annual dividend, STRC was designed as a reliable funding vehicle for continuous bitcoin purchases. But the instrument has buckled under market pressure. On Thursday, STRC dropped as much as 26% below its target par value, reaching a record low. Strategy's common shares also retreated to their weakest point since February 2024, closing around $82 on Friday — all against a backdrop of bitcoin sliding beneath the $59,000 threshold.

Garlinghouse described STRC's steep decline as a "damning indictment" of the overall approach, suggesting that using layered financial products to fund crypto accumulation introduces fragility rather than strength.

He's not the only voice raising alarms. Blockchain analytics firm CryptoQuant published a report this week recommending that Strategy pause its bitcoin purchasing and replenish its cash reserves. The firm noted that the dividend coverage cushion behind STRC has deteriorated sharply — shrinking from over seven years of coverage to roughly 14 months. When STRC trades below par, Strategy's share-issuance engine effectively stalls, which is precisely what has happened: the company has already paused that mechanism.

Not everyone shares such a dire outlook. Benchmark-StoneX analyst Mark Palmer pushed back against the gloom, characterizing Strategy's model as having grown "less efficient" rather than fundamentally broken. Palmer also rejected any comparison between STRC and financial instruments that have collapsed entirely, suggesting the situation — while difficult — remains recoverable.

For Garlinghouse, the episode is a broader lesson about priorities in crypto. Running Ripple, the company behind XRP — one of bitcoin's most prominent rivals in the digital asset space — he has long emphasized real-world utility as the foundation of sustainable value. His message this week was consistent: when market participants chase financial engineering over genuine use cases, the entire crypto market pays the price.

With bitcoin hovering near key support levels and Strategy's capital structure under scrutiny, the debate over whether institutional accumulation strategies strengthen or destabilize crypto markets is far from settled. What is clear is that the cracks in STRC's model have given critics fresh ammunition — and Garlinghouse is using it.