Ripple CEO Warns Michael Saylor’s Bitcoin Purchasing Model Is Harming the Market
Ripple CEO Brad Garlinghouse has publicly challenged strategy chairman Michael Saylor’s Bitcoin purchasing model, saying financial engineering cannot replace real-world utility.
His comments come as Strategy continues to accumulate more Bitcoin, even as Bitcoin continues to fall near $58,000.
Ripple CEO says Saylor is focusing on the wrong strategy.
In a recent CNBC interview, Garlinghouse said cryptocurrency companies should focus on building products that people actually use instead of relying on financial engineering to increase Bitcoin holdings.
“Financial engineering does not create long-term value.” “The long-term value of any digital asset will be driven by its utility.”
According to Garlinghouse, assets that provide real-world use naturally attract demand, liquidity, and trust over time. Simply borrowing more money to buy additional Bitcoin does not create lasting value.
He also took direct aim at Michael Saylor’s approach, saying:
“Michael Saylor’s team wasn’t focused on the right things, and that hurt the entire market.”
He said that while this type of financial engineering may be interesting in the short term, it does little to create lasting value for the cryptocurrency industry.
Bitcoin downtrend is getting worse due to leverage.
Also in the interview, Garlinghouse said that this strategy benefited during the Bitcoin rally and is putting more pressure on it during the current market crash.
“I think because they were using leverage… we’re starting to see this where it could actually have negative consequences.”
He specifically pointed out that Strategy’s STRC preferred stock is currently trading at about 25% below par value of $100, calling it a “very damning indictment.”
Describing Bitcoin as “digital gold,” he pointed out that transferring $300 billion worth of Bitcoin could be completed much faster and more efficiently than transferring the same value into physical gold.
Ripple Drives Institutional Blockchain Adoption
Garlinghouse praised Bitcoin’s role as digital gold and pointed out Ripple’s other strategies. He said Ripple is focused on bringing traditional finance to the blockchain through its XRP-based payment infrastructure.
According to Garlinghouse, Ripple processed nearly $16 trillion in payments and prime brokerage volume last year across its extended financial network.
Currently, Ripple’s XRP is trading around $1.05 and is up 2.5% in the last 24 hours.
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