STRC’s sharp decline has reignited a debate over how Strategy finances its Bitcoin purchases. In an interview with CNBC, Ripple CEO Brad Garlinghouse said lasting value in digital assets comes from real-world utility, not financial engineering. He directed his criticism at the funding structure used by Michael Saylor’s team over the past year, arguing that it has created negative spillover for the broader sector.
Garlinghouse was careful to separate that criticism from Bitcoin itself. His objection was not aimed at BTC as an asset, but at the mechanism Strategy has leaned on to keep buying more of it.
STRC falls away from its $100 reference point
STRC is a preferred share carrying a 11.5% annual dividend and an official target price near $100. Recent trading has pushed it down by about 25% from that level, sending the instrument to a record low. By Thursday, STRC was trading at a 26% discount to its nominal value.
Preferred shares can help companies raise capital without taking on traditional debt, but that channel becomes less attractive when the market price drops below a critical threshold. For Strategy, that weakens a funding route tied to continued Bitcoin accumulation and raises fresh questions about how durable the model is under stress.
Bitcoin below $59,000 adds to pressure
The move in STRC came as Bitcoin slipped under $59,000. Strategy’s common stock also fell to its lowest level since February 2024 before closing Friday at around $82. With pressure building in both the equity and crypto sides of the trade, volatility concerns have spread beyond one instrument.
CryptoQuant said in a recent report that Strategy may soon need to pause Bitcoin purchases and rebuild cash reserves. Its calculation shows the financial buffer supporting STRC dividends has contracted from more than seven years of coverage to just 14 months. If STRC remains below $100, the preferred-share mechanism used to fund additional Bitcoin buying also loses force.
Analysts split on whether the model is breaking down
Not everyone sees a full collapse. Benchmark and StoneX analyst Mark Palmer took a more restrained view, saying the model has not failed outright but is now generating materially lower returns. He also warned against treating STRC as if it were comparable to assets that have already completely unraveled.
The dispute now centers on whether capital-market-driven structures for Bitcoin accumulation can keep functioning during periods of price weakness. With STRC under pressure, Strategy shares falling, and Bitcoin below a key level, that question has become harder for the market to ignore.