Garlinghouse Rips Strategy's BTC Financing Model

Ripple CEO Brad Garlinghouse has expressed criticism of Strategy's approach to financing Bitcoin purchases. In an interview on CNBC, he stated that this strategy relies on 'financial engineering' that cannot create long-term value.

Garlinghouse believes the long-term value of digital assets should be driven by real-world utility. He thinks Strategy's team is not focused on what he considers the right direction and has harmed the broader crypto market as a result.

Garlinghouse remains optimistic about Bitcoin but opposes Strategy's strategy of increasing its BTC holdings through complex financing structures. One example he cited was Strategy's use of preferred stock issuance to fund Bitcoin purchases, specifically citing STRC, which carries an annualized dividend obligation of 11.5%. He noted that STRC recently traded at a discount of about 25% to 26% to its $100 par value.