Ripple CEO Criticizes Strategy’s Bitcoin Funding Model as STRC Hits Record Low

Ripple CEO Brad Garlinghouse said he remains bullish on bitcoin while criticizing Michael Saylor’s method of financing Strategy’s bitcoin purchases. In a CNBC interview on Friday, he argued that the company’s reliance on preferred shares amounted to financial engineering that had damaged the broader crypto market.

The criticism matters because Strategy’s financing model has become closely connected to its ability to keep accumulating bitcoin. Pressure on that structure intensified as bitcoin fell below $59,000 and the company’s STRC preferred stock dropped to a record low.

Strategy has issued preferred shares for roughly a year to raise money for additional bitcoin purchases. STRC pays an 11.5% annual dividend and is designed to trade near its $100 par value, but it recently traded about 25% below that level. Garlinghouse described the decline as a severe judgment on the model.

STRC fell as much as 26% below par on Thursday. Strategy’s common shares also reached their lowest level since February 2024 before closing around $82 on Friday.

CryptoQuant separately said Strategy should pause bitcoin purchases and rebuild its cash reserves. According to the firm, cash coverage for STRC dividends has declined from more than seven years to about 14 months. When STRC trades below $100, Strategy’s ability to issue more shares and direct the proceeds into bitcoin is constrained, contributing to a pause in that process.