Ripple CEO Takes Fresh Shot At Saylor's Strategy

Ripple CEO Brad Garlinghouse has renewed his public criticism of Michael Saylor and Strategy, arguing that the firm's leveraged Bitcoin accumulation model is built on financial engineering rather than lasting value creation.

Speaking on CNBC, Garlinghouse was direct: "Financial engineering doesn't drive long-term value. Utility does." He also said Saylor "wasn't focused on the right stuff," and suggested the approach has weighed on the broader crypto market.

STRC Discount Drives the Argument

At the center of Garlinghouse's case is Strategy's STRC perpetual preferred stock. During his CNBC interview, Garlinghouse pointed to STRC trading about 25% below its $100 par value despite its 11.5% annual dividend as a "damning indictment" of Strategy's financing model. The instrument was designed to hold near its $100 face value, making the sustained discount a notable signal from the market.

The financial pressure behind that discount is real. Annualized dividend payments tied to Strategy's preferred share classes have climbed to approximately $1.2 billion. In late May, Strategy sold 32 $BTC for $2.5 million, its first Bitcoin disposal in years, specifically to fund a dividend payment. Garlinghouse cited that transaction as evidence the model is under genuine strain rather than theoretical pressure.

Despite the criticism, Garlinghouse made clear his comments were directed at the financing strategy rather than Bitcoin itself. "I remain very bullish on Bitcoin over the long term," he said, describing the asset as "digital gold" and contrasting it favourably with the costs and friction of moving physical bullion.

A Feud With Deep Roots

The remarks are not the first time the two executives have clashed publicly. During a 2022 podcast appearance, Saylor stated that it was "pretty obvious" that $XRP was an unregistered security, and urged the SEC to shut down XRP and other altcoins. Those comments opened a long-running divide between the two figures, with Garlinghouse now using Strategy's balance sheet difficulties to sharpen his counter-argument: that durable value in crypto comes from utility, not leverage.

Garlinghouse pointed to Ripple's own operations to back his thesis. He said Ripple cleared roughly $16 trillion in payments last year, framing the gap between that volume and actual digital asset usage as the company's core opportunity. Whether the market ultimately agrees may depend as much on $XRP adoption as on what happens to Strategy's preferred share price.

Sources:
CoinDesk: Ripple CEO stays bullish on bitcoin but says Saylor's strategy has hurt crypto
Cryptopolitan: Ripple CEO Garlinghouse gives 'damning indictment' verdict on Saylor's BTC influence
The Daily Hodl: Michael Saylor Says SEC Should Shut Down XRP for Being Unregistered Securities (2022)