Ripple CEO Blasts Saylor's Leveraged Bitcoin Strategy as STRC Preferred Stock Drops 25% Below Par

Key Takeaways

Ripple CEO Brad Garlinghouse delivered a pointed critique of Strategy's leveraged Bitcoin strategy during a June 26 appearance on CNBC's Squawk on the Street. While maintaining a bullish stance on Bitcoin itself, Garlinghouse argued that the financial engineering around it — specifically Strategy's preferred stock offerings — is damaging the broader crypto ecosystem.

His central exhibit was STRC, Strategy's Variable Rate Series A Perpetual Stretch Preferred Stock, which carries an 11.5% annual dividend and is designed to trade near its $100 par value. At the time of Garlinghouse's remarks, STRC was changing hands around $74, roughly 26% below par. He described that gap as “a pretty damning indictment” of the model's sustainability.

The critique extended to leverage mechanics. Garlinghouse noted that Strategy's structure amplified gains during Bitcoin's rally but is now magnifying losses as prices retreat. The market, he suggested, is pricing in a real risk that the company may struggle to maintain its dividend obligations.

Ripple processed nearly $16 trillion in payments and prime brokerage volume last year through its XRP-powered infrastructure. Garlinghouse acknowledged that digital assets still represent a small portion of actual settlement volume, but framed the gap as a massive addressable opportunity.

Peter Schiff escalated the debate further this week. In a sharp social media post, Schiff accused Michael Saylor of making statements that crossed from promotional into “materially false and misleading” territory. The specific claim Schiff flagged: Saylor described Strategy's digital credit instruments as equivalent to “a bank account with no stress and no volatility that pays 10%.” Schiff countered that STRC fell 18% last week alone and traded as low as 28.75% below par — hardly a no-volatility asset.

The language Schiff used carries legal weight. “Materially false and misleading” is a phrase commonly associated with securities law and investor disclosure standards, though Schiff stopped short of calling for regulatory action.

Neither criticism exists in a vacuum. Strategy holds more than 843,000 Bitcoin purchased at an average cost of approximately $75,646 per coin. With Bitcoin trading near $59,000–$60,000 at time of writing, the company sits on roughly $13 billion in unrealized losses on its primary asset.

Annualized dividend obligations across Strategy's preferred share classes have climbed to approximately $1.2 billion. The dividend coverage window has narrowed from more than seven years at the start of 2026 to roughly 14 months. In May, Strategy sold 32 Bitcoin — its first disposal in years — specifically to fund an STRC dividend payment. Garlinghouse cited that detail as proof that the model's internal logic is under real strain, not just theoretical pressure.

A securities investigation that began earlier in 2026 adds another layer of institutional uncertainty to an already pressured balance sheet. Saylor's public response to the criticism was defiant. He posted that “digital credit is income for investors who believe in Bitcoin” and described severe drawdowns as a test of conviction rather than a reason to reconsider. Strategy has not formally responded to Schiff's specific allegation of materially false statements.

The 25% to 29% discount on a preferred stock with an 11.5% dividend is, in effect, the market's live assessment of Strategy's ability to sustain those payments. A preferred stock trading at par signals confidence that dividends are secure and terms will be honored. A discount of this magnitude signals the opposite: the market is pricing in meaningful risk that the 11.5% yield will not be paid in full, or will require conditions — specifically a higher Bitcoin price — that are not currently in place.

STRC is not a bank account. It is not free from stress or volatility. It is a preferred stock issued by a company with more than $13 billion in unrealized Bitcoin losses, $1.2 billion in annual dividend obligations, and a dividend coverage window of roughly 14 months. Yet Michael Saylor this week compared it to a savings account paying 10%. The market tells a different story: STRC is trading nearly 29% below its $100 par value.

This article originally appeared on CCN.com.