XRP Chief Garlinghouse Says Strategy’s 25% STRC Slide Hurt Crypto Market

XRP News

Ripple Chief Executive Brad Garlinghouse argued that Strategy’s preferred-stock funding model has damaged the broader crypto market, even as he reaffirmed his bullish stance on Bitcoin itself. Garlinghouse, who runs the company behind XRP, the long-standing Bitcoin rival and one of the largest payment-focused altcoins, said lasting value in digital assets comes from real-world usefulness rather than capital-markets maneuvering. He pointed to Strategy’s STRC preferred share trading roughly 25% below its target as what he called a “damning indictment” of the approach. “Financial engineering does not drive long-term value,” he said, separating his critique of the funding machine from his view on the asset.

At the center of the criticism sits STRC, the perpetual preferred stock Strategy has issued over the past year to raise cash for additional Bitcoin purchases. The instrument carries an 11.5% annual dividend and is engineered to trade near its $100 par value, giving the company a steady funding channel without taking on conventional debt. Garlinghouse highlighted that the share recently slipped about 25% below that level to a record low, a move he reads as eroding investor confidence in the model. When preferred shares drift far from par, the appeal of fresh issuance weakens, which directly throttles the cash Strategy can deploy into the market.

The pressure intensified alongside a sharp Bitcoin decline, with the benchmark cryptocurrency slipping below $59,000. On Thursday, STRC fell as much as 26% beneath its par value, while Strategy’s common stock dropped to its lowest level since February 2024 and closed around $82 on Friday. The simultaneous weakness across the company’s equity, its preferred shares and its underlying Bitcoin holdings underscores how tightly the treasury model is wired to a single asset. Our reading of the price action is that the feedback loop cuts both ways: rising Bitcoin amplified the engine on the way up, and the same leverage now magnifies the strain during the drawdown.

On-chain analytics flagged a thinning safety margin behind the dividend obligations. One report urged Strategy to pause its Bitcoin accumulation and rebuild cash reserves, calculating that the cushion covering STRC’s payouts has compressed from more than seven years of coverage to roughly 14 months. The mechanism is straightforward: when STRC trades below $100, the company’s loop of issuing shares and buying Bitcoin stalls, which is precisely why the program has been paused. That stall removes a steady source of spot demand the market had grown accustomed to, a dynamic worth watching for anyone tracking Bitcoin flows in the weeks ahead.

Not every assessment treats the model as broken. A Benchmark-StoneX analyst argued that Strategy’s funding engine has become less efficient rather than impaired, and rejected comparisons between STRC and structures that have collapsed outright. The distinction matters: an inefficient mechanism can still recover once Bitcoin stabilizes and the preferred share climbs back toward par, whereas a structurally failed one cannot. Strategy built its position aggressively while Bitcoin pushed toward its all-time high, and the analyst’s view is that the same machinery simply throttles down rather than seizing when prices retreat.

Underlying Garlinghouse’s remarks is a broader thesis he has pushed for years: that adoption and genuine utility, not leveraged balance-sheet engineering, should anchor a digital asset’s value. He framed Bitcoin’s strength as rooted in its decentralized, mining-secured network rather than in any single corporate treasury strategy, and tied XRP’s relevance to cross-border payment use cases. The comments arrive as Strategy’s once-celebrated playbook faces its most public scrutiny to date. For XRP holders, the episode is a reminder that concentrated treasury bets can transmit stress across the wider market, independent of any specific token’s fundamentals.

(as of 11:02 UTC) On COINOTAG’s own data, XRP changed hands near $1.06, up about 1.91% on the day as of this writing. Our proprietary 42-indicator composite S/R scoring engine rates the $1.0698 resistance at 76/100 (strong), a confluence built on the R1 pivot, the Fibonacci 0.114 retracement and a fresh MACD cross, while the $1.0320 floor scores 57/100, supported by the S2 pivot and the lower Bollinger and Keltner bands. With RSI at 33.87 and the MACD still bearish inside a broader downtrend, momentum stays soft. Derivatives temper the gloom: funding sits marginally negative at -0.0026%, open interest holds near $644 million, and the long/short account ratio of 2.88 shows 74.2% of traders positioned long. With the Fear & Greed Index at 15 (extreme fear), consistent with broader bear-market conditions, a sustained reclaim of $1.07 would open the bullish case, while a daily close below $1.0320 would invalidate it and expose the $0.86 region.