Ripple CEO Brad Garlinghouse criticized Strategy's preferred-stock funding model for buying bitcoin, calling it 'financial engineering' that has damaged the broader crypto market. In a CNBC interview on Friday, Garlinghouse argued that lasting value in digital assets comes from usefulness, not financial engineering. He pointed to STRC, Strategy's preferred share carrying an 11.5% dividend designed to trade near $100, which fell about 25% below par to a record low, as evidence. Strategy's common stock also dropped to its lowest since February 2024, closing around $82, as bitcoin slipped below $59,000. The criticism comes amid mounting pressure on Strategy's model. CryptoQuant reported that the cushion behind STRC's dividends has thinned from over seven years to about 14 months, suggesting a pause in bitcoin buying. When STRC trades below $100, Strategy's issuance engine stalls, leading to a halt. However, Benchmark-StoneX analyst Mark Palmer argued the funding engine is 'less efficient' rather than broken, rejecting comparisons to collapsed assets. Garlinghouse remains bullish on bitcoin itself, distinguishing his view on the asset from his critique of Strategy's method.

Key facts

• Garlinghouse called Strategy's preferred-stock model 'financial engineering' that distracts from real value
• STRC fell 25% below par to a record low, with common stock at lowest since Feb 2024
• CryptoQuant warns STRC dividend coverage shrank from 7 years to 14 months
• STRC trading below $100 stalls Strategy's issuance engine, halting bitcoin buying
• Benchmark analyst says funding engine is 'less efficient' but not broken

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