Saylor's "Financial Engineering" Gets an F From the Guy Who Sells XRP 🚬

Ripple CEO Brad Garlinghouse said Friday that he remains bullish on bitcoin but argued that Michael Saylor's preferred-share funding model at Strategy has damaged the broader crypto market, calling the approach "financial engineering" that distracted from real utility. "Financial engineering does not drive long-term value," Garlinghouse said in a CNBC interview. "Long-term value of any digital asset is going to be driven by utility." He added, "Team Michael Saylor wasn't focused on the right stuff and that has hurt the overall market."

Garlinghouse's target was Strategy's preferred-stock program. For about a year, Strategy has issued preferred shares to raise cash for additional bitcoin purchases. Its STRC share carries an 11.5% cumulative annual dividend and is designed to trade near a $100 face value. Garlinghouse pointed to STRC sliding roughly 25% below par, hitting a record low on Thursday after falling as much as 26%, as a "damning indictment" of the financing model.

Pressure on the structure intensified this week as $BTC slipped below $59,000 on Friday. Strategy's common stock (MSTR) dropped to its lowest level since February 2024 and closed around $82 on Friday. Strategy has paused issuance of STRC while it trades below $100, effectively stalling its engine for raising new capital to buy more $BTC.

CryptoQuant said in a report that Strategy should pause bitcoin buying and rebuild cash reserves, noting the cushion behind STRC's dividend coverage had thinned from more than seven years to roughly 14 months. Benchmark-StoneX analyst Mark Palmer argued that Strategy's funding engine has become "less efficient" rather than broken, and rejected comparisons between STRC and assets that have collapsed outright.

Garlinghouse stressed that his criticism of the funding strategy was separate from his view on the underlying asset, reaffirming that he is still bullish on bitcoin even as he faulted Saylor's execution for weighing on the broader crypto market.