I'll be honest, when a CEO whose company directly competes with Bitcoin criticizes Michael Saylor's strategy, you have to weigh that context. Brad Garlinghouse runs Ripple, the company behind XRP, a token that has long been positioned as an alternative to Bitcoin's dominance. He has every competitive reason to talk down the Strategy model.
And yet, the specific argument he made in his CNBC interview on Friday is harder to dismiss than the competitive angle might suggest.
What Garlinghouse Actually Said
Garlinghouse was clear that he remains personally bullish on Bitcoin as an asset. That part is an important context and I don't want it to get lost. He is not predicting Bitcoin fails. He is not calling for its collapse.
What he is criticizing is the mechanism Saylor built around Bitcoin, the preferred stock funding model that Strategy has used to raise billions and buy more BTC. His phrase for it was blunt: financial engineering. His argument was equally direct, financial engineering does not drive long‑term value, and Team Saylor wasn't focused on the right things, and that has hurt the overall market.
The Evidence He Pointed To
Garlinghouse didn't leave that claim as an abstraction. He pointed directly at STRC, Strategy's Variable Rate Preferred Stock, designed to trade at $100 par value, which had fallen roughly 25% below that level to a record low. He called it a damning indictment of the approach.
I've been covering STRC's collapse throughout this month, so the numbers behind Garlinghouse's argument are ones I've tracked closely. The stock hit an intraday record low last Thursday, falling as much as 26% below par. Strategy's common stock fell to its lowest level since February 2024 and closed around $82 on Friday. All of this happened while Bitcoin itself broke below $59,000 for the first time since September 2024.
The preferred stock that was supposed to generate permanent funding for Bitcoin accumulation is now trading like a distressed asset. That's the specific failure Garlinghouse is pointing at.
Why the Timing of This Criticism Matters
The pressure on Strategy's model has been building for weeks with very specific catalysts. CryptoQuant published a report recommending Strategy pause its Bitcoin buying and rebuild cash reserves, noting dividend coverage had shrunk from more than seven years to approximately 14 months. The at‑the‑market STRC issuance program, Strategy's mechanism for raising new capital to buy Bitcoin, has been paused because the stock is below par.
Garlinghouse is making his public criticism at precisely the moment those internal pressures are most visible to the market.
The Counter Argument Worth Hearing
I want to give the other side its fair weight. Benchmark‑StoneX analyst Mark Palmer argued this week that Strategy's funding model has become less efficient, not broken, and rejected comparisons to collapsed assets like Terra. He also noted that STRC's structure and obligations are categorically different from algorithmic tokens that had no underlying real asset.
Strategy still holds approximately 847,000 BTC. It still has $1.4 billion in cash reserves. The preferred equity model is strained, not collapsed.
What I Take From This
Garlinghouse's competitive interest in making this argument doesn't make the argument wrong. The STRC chart, the shrinking dividend coverage, and the paused issuance program all stand as independent data points that don't require a Ripple CEO to point them out.
The more interesting question is whether Strategy's model becomes a cautionary tale for the wave of corporate Bitcoin treasury strategies that followed Saylor's lead, or whether a Bitcoin recovery resolves all of this before the structural stress becomes something more serious.
For now, the stress is visible. And in a week when Bitcoin hit a 21‑month low, even Saylor's most committed defenders would struggle to argue the model is firing on all cylinders.
