Wall Street Saw Ripple as 90% $XRP
— Offered $500M, but With Safety Net: Bloomberg
Multiple investors concluded that at least 90% of Ripple’s net asset value was tied to XRP, the closely-linked token that maintains distance from the company legally.
What to know:
Ripple's recent $500 million share sale attracted major financial firms, but with structured credit-like protections, according to Bloomberg.Investors secured rights for a guaranteed return and liquidation preference due to Ripple's heavy exposure to XRP.U.S. spot $XRP ETFs are nearing $1 billion in inflows, aided by a favorable court ruling clarifying XRP's status.But under the hood, writes Bloomberg's Ryan Weeks, several funds treated it as a concentrated bet on one volatile asset.Multiple investors concluded that at least 90% of Ripple’s net asset value was tied to XRP, the closely-linked token that maintains distance from the company legally. Ripple controlled $124 billion worth of XRP at market prices in July in its treasury.Institutions appear comfortable with that exposure, but only with guardrails in place. That hefty, risky exposure caused funds to negotiate the unusually strong protections: 1. The right to sell their shares back to Ripple after three or four years at a guaranteed 10% annualized return,2. A 25% annualized return if Ripple forces a buyback, and 3. A liquidation preference, giving them priority over legacy shareholders in a sale or insolvency.Those terms amount to a synthetic floor under investors’ capital, making for a structure rarely used in late-stage tech financings but increasingly common as traditional finance adapts its riskmanagement playbook to crypto’s volatility.XRP has since fallen roughly 40% from its mid-July peak amid the broad downdraft that hit the broader crypto market October and November.Meanwhile, U.S. spot $XRP ETFs areon track to surpass $1 billion in inflows soon, following a 15-day streak of net investments. The ETFs have likely benefited from the resolution of Ripple's court case with the SEC, which clarified XRP's regulatory status