Ripple CEO Says Saylor’s “Financial Engineering” Has Hurt Crypto, Even as Bitcoin Itself Stays a Good Bet

Ripple chief executive Brad Garlinghouse said Strategy’s strategy of funding bitcoin purchases with preferred-stock issuance has hurt the broader crypto market, even as he stressed he remains bullish on bitcoin itself.

“Financial engineering does not drive long-term value,” Garlinghouse said, drawing a line between his criticism of the funding mechanism and his view of the underlying asset. 

He pointed to Strategy’s STRC preferred shares, designed to trade near a US$100 (AU$145) par value, which have fallen about 25% below it and hit a record low on Thursday, dropping as much as 26% under par despite carrying an 11.5% annual dividend.

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A Shrinking Cushion

The criticism landed as analysts at CryptoQuant urged Strategy to pause its bitcoin buying and rebuild cash reserves. The firm noted that the dividend coverage cushion behind STRC has collapsed from more than seven years to roughly 14 months, a sharp narrowing of the buffer that funds the preferred stock’s payouts.

The strain has been visible elsewhere in Strategy’s capital structure. Its common stock fell to its lowest level since February 2024, closing around US$82 (AU$118.90) on Friday, while bitcoin slipped below US$59,000 (AU$85,550) over the same stretch. 

Late in May, the company sold 32 bitcoin to help fund STRC dividend payments, the first time it had liquidated any of its holdings to meet an obligation, underscoring the pressure the dividend commitments place on its cash position.

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