Svmuu News: In an interview with CNBC on Friday, Ripple CEO Brad Garlinghouse criticized Strategy and its chairman Michael Saylor’s “Bitcoin” funding model, stating that “financial engineering cannot create long-term value” and that the long-term value of digital assets should ultimately be driven by their actual utility.
Garlinghouse stated that Saylor’s team is not focusing on the right direction and believes this approach has harmed the crypto market as a whole. He also emphasized that he remains bullish on Bitcoin, but opposes Strategy’s strategy of continuously increasing its BTC holdings through complex financing structures.
His criticism was directed specifically at Strategy’s model of financing the purchase of Bitcoin through the issuance of preferred stock.STRC is one of the preferred shares issued by Strategy, with an annualized dividend obligation of 11.5%. Recently, STRC traded at a discount of approximately 25% to 26% relative to its $100 par value; Garlinghouse described this performance as a “seriously negative assessment” of Strategy’s approach.