Ripple CEO Calls Saylor's Bitcoin Model 'Damning
SkimNews Take
Distinguishing between bitcoin the asset and the leveraged corporate structures used to acquire it exposes a fault line that could push institutional exposure toward direct holdings rather than preferred-share vehicles.
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Brad Garlinghouse, CEO of Ripple, said Michael Saylor's preferred-share funding model for buying bitcoin has hurt the broader crypto market, while separating that critique from his own bullish stance on bitcoin in a Friday CNBC interview.
- Garlinghouse called the strategy 'financial engineering' and argued that 'lasting value of any digital asset comes from its usefulness,' not financial engineering, saying 'Team Michael Saylor wasn't focused on the right stuff.'
- Strategy's STRC preferred stock, which carries an 11.5% annual dividend and is engineered to trade near $100, fell as much as 26% below par to a record low on Thursday — a move Garlinghouse labeled a 'damning indictment' of the model.
- Strategy's common stock dropped to its lowest since February 2024 and closed around $82 on Friday, all as bitcoin slipped below $59,000.
- CryptoQuant recommended Strategy pause bitcoin buying and rebuild cash reserves, noting STRC's dividend coverage cushion has thinned from more than seven years to roughly 14 months.
- Benchmark-StoneX analyst Mark Palmer pushed back, arguing the funding engine has become 'less efficient' rather than broken and rejecting comparisons between STRC and assets that have collapsed outright.
Why it matters: Garlinghouse draws a sharp line between the bitcoin thesis and Strategy's funding model — he's bullish on the asset but targeting the 'financial engineering.' CryptoQuant's data hardens the stakes: STRC's dividend coverage cushion has thinned from 7+ years to roughly 14 months, and Strategy has already paused share issuance while its common stock sits at its lowest since February 2024.
Ask SkimNews
