Ripple CEO Brad Garlinghouse Says Michael Saylor’s BTC Plan Hurt Crypto Market

• Brad Garlinghouse said financial engineering cannot replace real-world utility in creating long-term crypto value.
• He criticized Strategy’s leveraged Bitcoin acquisition model and cited falling STRC prices as a warning sign.
• Garlinghouse contrasted Strategy’s approach with Ripple’s focus on blockchain payments and financial infrastructure.

Ripple CEO Brad Garlinghouse criticized Michael Saylor’s Bitcoin acquisition strategy, saying financial engineering cannot replace real utility in digital assets. In a CNBC interview on Friday, Garlinghouse questioned Strategy’s use of preferred shares to fund Bitcoin purchases and highlighted falling STRC prices as evidence of pressure on the model.

Saylor's Bitcoin Funding Model Faces Criticism

Garlinghouse said Strategy’s approach has affected the wider crypto market as Bitcoin traded below $60,000. However, he maintained that he remains bullish on Bitcoin and described the asset as digital gold.

“Financial engineering does not drive long-term value,” Garlinghouse said. He added that digital assets gain lasting value through utility rather than funding structures.

According to Garlinghouse, Strategy’s use of leverage helped during Bitcoin’s rise but created additional pressure during market declines. He said the approach could create negative effects when market conditions weaken.

The Ripple CEO specifically pointed to Strategy’s STRC preferred shares, which traded around $74. The price stood about 25% below the $100 par value. He called the decline a “damning indictment” of the company’s financing approach.

STRC Dividend Pressure 

Strategy has used preferred securities, including STRC, to raise funds for additional Bitcoin purchases. The shares carry an 11.5% annual cumulative dividend obligation.

Notably, the company’s dividend commitments have increased as investors review its capital structure. Reports said annualized STRC dividend payments reached about $1.2 billion.

Furthermore, Strategy sold 32 Bitcoin in late May to help fund STRC dividend payments. The move marked the first reported Bitcoin sale by the company for that purpose.

Ripple Highlights Utility-Focused Approach

Garlinghouse said crypto companies should focus on building products with real-world use. He said utility creates demand, liquidity, and trust for digital assets.

Meanwhile, he contrasted Strategy’s approach with Ripple’s focus on blockchain-based financial infrastructure. Garlinghouse said Ripple processed nearly $16 trillion in payment and prime brokerage volume last year through its network.

The comments came as Strategy’s securities faced pressure during Bitcoin’s decline. CryptoQuant also advised Strategy to pause Bitcoin purchases and increase cash reserves.

The post Ripple CEO Brad Garlinghouse Says Michael Saylor’s BTC Plan Hurt Crypto Market appears on Crypto Front News. Visit our website to read more interesting articles about cryptocurrency, blockchain technology, and digital assets.