Ripple CEO: Still bullish on Bitcoin, but Strategy's preferred stock financing model has damaged the crypto market.

Deep Tide TechFlow News, June 27 - Brad Garlinghouse said in an interview with CNBC that he remains optimistic about Bitcoin's development prospects but believes that Strategy's continuous purchases of Bitcoin through preferred stock financing have had a negative impact on the crypto market.

Garlinghouse stated, "Financial engineering does not drive long-term value." He argued that the long-term value of any digital asset ultimately comes from real-world applications, and criticized Michael Saylor's team for not focusing on truly creating value, instead relying excessively on financing tools.

He pointed out that over the past year, Strategy has continuously raised funds through the issuance of preferred stock to buy Bitcoin. Among them, the STRC preferred stock has an annual dividend rate of 11.5%, with a designed trading price close to $100. However, it is currently trading at a discount of about 25% to its face value and hit a record low this week. Meanwhile, Strategy's common stock fell to its lowest level since February 2024, and Bitcoin's price also dropped below $59,000.

Recently, Strategy's financing model has also faced scrutiny from some market institutions. CryptoQuant believes the company should suspend further Bitcoin accumulation and rebuild cash reserves, as its ability to cover preferred stock dividends has shrunk from over seven years to about 14 months. When STRC remains below face value for an extended period, Strategy's mechanism of issuing equity to finance Bitcoin purchases will be constrained.

However, Benchmark-StoneX analyst Mark Palmer holds a different view, arguing that Strategy's financing engine has only become less efficient, not broken down, and that the current situation should not be compared to a collapse of the financing model.