Ripple’s change in strategy, moving from its SEC legal fight to building new financial infrastructure, is officially a massive success. The company just secured a $500 million funding round that values the private company at a stunning $40 billion.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
This massive investment, driven by Wall Street giants like Citadel Securities and Fortress Investment Group, is a direct and powerful confirmation of the market’s bullish outlook for XRP (XRP-USD).
Institutional investors are looking past Ripple’s expanded focus and seeing the core value. Crucially, two of the participating funds concluded that a staggering 90% of Ripple’s net asset value was tied to XRP. This means that for the world’s most cautious money managers, investing half a billion dollars in Ripple is essentially a $500 million bet on XRP’s future performance.
Guaranteed Returns Lure Money Managers to the XRP Bet
Ripple secured this heavy roster of institutional funds by offering a strategic deal structure that minimized risk while maximizing the potential upside of an XRP price surge.
The key terms allow investors to sell their shares back to Ripple after three or four years at a guaranteed annualized return of 10%. This safety net protects capital from crypto volatility. However, if Ripple goes public, a move predicated on successfully leveraging its massive XRP holdings, the institutional funds would capture the massive returns associated with the token’s price leap.
This protective deal structure confirms two things. First, Wall Street is confident in XRP’s future as the primary source of Ripple’s valuation. Second, Ripple has bought the institutional legitimacy it needs to build its comprehensive settlement stack, an infrastructure that will rely on XRP for utility.
Infrastructure Push Will Drive XRP Utility
To reduce its reliance on just XRP, Ripple is rapidly building an infrastructure ecosystem for institutions. The company has spent $2.25 billion to acquire non-bank prime broker Hidden Road (now Ripple Prime) and treasury-management company GTreasury.
Ripple is positioning itself as a one-stop-shop for institutions to access digital assets, combining custody, treasury, prime brokerage, and its dollar-pegged stablecoin, Ripple USD (RLUSD). As more institutions use this new stack, the demand for XRP for cross-currency settlements will grow, directly increasing the token’s fundamental utility and driving its price higher.
Key Takeaway
The final takeaway from this story is simply that Wall Street money confirms XRP is the engine of Ripple’s $40 billion success, signaling massive future price potential.
By locking in $500 million from top-tier institutional funds, Ripple bought the confidence it needs to build its new financial infrastructure. Since these investors see 90% of the company’s value tied to XRP, every move Ripple makes to increase its institutional utility will be viewed by the market as a direct investment in XRP’s price growth.
At the time of writing, XRP is sitting at $2.0739.
