In a recent interview with CNBC, Ripple CEO Brad Garlinghouse stated that Strategy, relying on financing instruments to buy bitcoin on a continuous basis, would increase market heat in cattle markets, but would also put additional pressure on the whole encrypted market in times of weakness.

He focused his criticism on the capital structure, not on the bitcoin itself. Garlinghouse said that he was still looking at bitcoin and believed that bitcoin had established a market position for “digital gold”. At the same time, however, he stressed that the long-term value of digital assets could not be sustained by financial structures alone, but also required real use, customer demand, liquidity and market confidence.

The financing model for Strategy

Garlinghouse mentioned that Strategy had been raising funds in recent years through instruments such as priority securities, and that funds had been used to raise bitcoin. Of these, STRC has 11.5 per cent of the accumulated annual dividends, designed to be traded around $100 in nominal value.

In his view, such instruments, if broken, would often be viewed by the market as negative signals and would expose the model ' s continued dependence on external financing. According to him, when investors' demand for such instruments, which were linked to the increase in bitcoin, diminished, the structural vulnerability was more evident.

The pressure from the drop is being amplified.

It was mentioned that the link data and research institute, Cripto Quant, had this week issued a similar warning that Strategy should suspend the purchase of bitcoin and give priority to the restoration of cash reserves. The agency mentioned that dividends cover pressures and financial flexibility were declining against the backdrop of the weakening of Bitcoin prices.

  • STRC cumulative annual dividends 11.5%
  • The tool design is close to $100 in face trade.
  • CryptoQuant recommends that priority be given to restoring cash reserves

This has led to more discussion in the market about the “finance buy-and-take” path. Proponents argue that this approach can magnify bitcoin exposure over a long period of time, while critics fear that, once the market enters a falling phase, the cost of financing, the pressure on dividends and the difficulty of refinancing may rise simultaneously.

Ripple still emphasizes the payment scene

In spite of the criticism of Strategy, Garlinghouse made it clear that he was looking at bitcoin. He stated that bitcoin was easier to move across regions than in-kind gold, which was also an important basis for its “digital gold” positioning.

At the same time, he also took the opportunity to reiterate Ripple's layout of the XRP and the agency's payments. Garlinghouse states that the value of XRP is more in terms of the speed of payments and the efficiency of block-chain settlements, which are oriented towards the use of scenarios by financial institutions.

He also stated that Ripple had dealt with the scale of payments of approximately $16 trillion over the past year through its main broker, only a small part of which was directly related to digital assets. According to him, the future opportunity was to introduce more traditional financial activities into the digital asset settlement system.

This statement also reflects a continuing disagreement in the current encrypted market as to whether the valuation of digital assets should be driven more by the buying of currency, revenue-based products, payment purposes, the use of DeFi, or by institutional adoption. The answers given by different companies to this question are increasingly affecting market narratives.