Ripple CEO Brad Garlinghouse has publicly criticized MicroStrategy’s Bitcoin acquisition strategy, calling it harmful to the broader cryptocurrency market. In a CNBC interview, Garlinghouse pointed to the 25% discount on MicroStrategy’s perpetual preferred stock (STRC), which trades well below its $100 par value, as evidence that the leveraged buy model creates distortions and lacks long-term viability.
Garlinghouse specifically targeted the borrow-to-buy approach used by MicroStrategy co-founder Michael Saylor, where the company issues debt and equity to fund massive Bitcoin purchases. The STRC security, designed to pay a fixed dividend, has plunged to an all‑time low, with the discount now reflecting investor skepticism about the sustainability of this high‑risk treasury plan. The annualized dividend obligation currently stands at 11.5%.
The Ripple executive contrasted his own company’s focus on real‑world utility for the XRP Ledger through payments and partnerships. “When a company’s preferred stock trades at a 25% discount, it signals a lack of confidence in the underlying strategy,” Garlinghouse said, adding that aggressive accumulation through leverage “does not benefit the broader crypto ecosystem in a sustainable way.”
The criticism comes as Bitcoin’s price retraced below $60,000, with MicroStrategy’s common shares (MSTR) also falling, closing around $82 on Friday. Analytical firm CryptoQuant formally recommended that the corporation temporarily halt Bitcoin purchases and prioritize rebuilding liquid cash reserves to cushion future downturns.
Despite his sharp criticism, Garlinghouse reiterated a bullish medium‑term view on Bitcoin, limiting his concerns strictly to the corporate financial engineering. The debate highlights a growing divide between leveraged accumulation and utility‑driven growth, a tension that will likely persist as more companies explore Bitcoin as a treasury asset.
