Ripple CEO Criticizes Michael Saylor as Strategy's STRC Shares Trade 25% Below Par
Ripple CEO Brad Garlinghouse has criticized Strategy Chairman Michael Saylor, arguing that the company’s Bitcoin acquisition strategy is damaging the broader cryptocurrency market. Speaking during an interview with CNBC, Garlinghouse said long-term value in digital assets should come from real-world utility rather than financial engineering.
According to Garlinghouse, companies should focus on building practical blockchain use cases instead of relying on complex funding methods to expand Bitcoin holdings.
Strategy's Preferred Share Model Faces Growing Scrutiny
Garlinghouse’s remarks come as Strategy continues to rely on perpetual preferred shares to finance additional Bitcoin purchases. The company has issued securities such as STRC, allowing it to raise capital while expanding its Bitcoin treasury.
However, this approach has raised concerns among investors. Strategy’s preferred shares currently carry an annual cumulative dividend obligation of 11.5%, increasing the company’s long-term financial commitments.
STRC Shares Drop Well Below Their Par Value
One of Garlinghouse’s strongest criticisms focused on the performance of Strategy’s STRC preferred shares.
The stock recently traded nearly 25% below its intended $100 par value, which Garlinghouse described as a clear sign that the company’s financing strategy is under pressure. He called the decline a “damning indictment” of Strategy’s current approach to funding Bitcoin purchases.
Bitcoin Price Weakness Adds More Pressure
Garlinghouse made his comments as Bitcoin continued trading below $60,000. Although he remains optimistic about Bitcoin’s long-term future, he believes sustainable value will ultimately depend on adoption and utility rather than aggressive financial structures.
Ripple, the company led by Garlinghouse, continues to support the growth of XRP while maintaining a positive outlook on the broader cryptocurrency market.
Analysts Recommend Strengthening Cash Reserves
Market analysts have also expressed concerns over Strategy’s financial position. Earlier this week, CryptoQuant suggested that the company should temporarily pause additional Bitcoin purchases and focus on rebuilding its cash reserves.
The recommendation follows increasing financial obligations linked to preferred shares and growing pressure on the company’s balance sheet.
Strategy Shares Continue to Decline
The market reaction has been significant. STRC shares recently fell to a record low, trading as much as 26% below their $100 par value before recovering slightly.
At the same time, Strategy’s common shares dropped to their weakest level since February 2024, reflecting investor concerns as Bitcoin briefly declined to $58,000.
Market Outlook
The debate between Ripple and Strategy highlights two different approaches to cryptocurrency investing. While Strategy continues to expand its Bitcoin holdings through preferred share financing, critics argue that long-term success will depend on sustainable business models, healthy cash reserves, and real-world blockchain adoption rather than financial leverage alone.
