with investors betting on the enormous treasure of XRP - What does this mean for XRP?
Ripple secures $500 million at a valuation of $40 billion, while Wall Street prices in its strong exposure to XRP.
XRP is trading near $2.06 after a month of a 8.75% decline, although the token has recovered 2.02% in the last week. Market sentiment changed after Ripple closed a $500 million funding round, which represented the company's strongest move towards institutional alignment in this cycle.
The capital increase raised Ripple's market value to $40 billion and attracted the attention of large companies that have been closely monitoring the company's regulatory and market position for some time.
Ripple secures significant investment with structured protections.
According to Bloomberg, Ripple secured the funds through a structured equity sale to attract institutions seeking exposure to cryptocurrencies with clear protection against losses. Participants included Citadel Securities, Fortress Investment Group, Marshall Wace, entities linked to Brevan Howard, Galaxy Digital, and Pantera Capital. The round resembled more of a structured credit than a typical late-stage venture capital deal, as investors negotiated terms that protect their investments from the volatility of cryptocurrencies.
The deal included an option for investors to resell their shares to Ripple after three or four years, with a guaranteed annual return of 10%. If Ripple initiates a buyback program, the return rises to 25% per year. Investors also received liquidation preference rights, which guarantee them priority over existing shareholders in the event of a sale or restructuring of the company. These terms indicated that the invested capital required solid contractual protections before assuming any risk tied to Ripple's business model.
The influence of XRP shapes the funding round.
Bloomberg reported that investors viewed Ripple as an entity whose valuation was primarily driven by its treasury of XRP. Several funds concluded that up to 90% of Ripple's net asset value came from its reserves. Ripple held $124 billion in XRP at market prices in July, before a broader correction hit the sector. Despite a 40% drop since mid-summer and a 16% depreciation since late October, Bloomberg estimates that Ripple's current reserves exceed $83 billion.
This value is well above Ripple's market valuation of $40 billion and the trades that shaped the spread. Ripple's token reserves influenced the financing structure, as institutions sought protective clauses while recognizing the scale of the company's assets. The deal showed that the size, liquidity, and long-term presence of XRP in the market remain fundamental to how institutional investors price Ripple's business.
Institutional interest extends to XRP ETFs.
Institutional attention also reached XRP through exchange-traded products. The spot XRP ETFs in the US continue to attract significant flows since their launch on November 14. Data from SoSoValue shows net inflows of over $900 million after 15 consecutive days of positive activity.
Products from Canary Capital, Grayscale, Bitwise, and Franklin Templeton accounted for most of the investments. Various market analysts expect the ETFs to surpass the $1 billion mark soon.
Mati Greenspan, founder of Quantum Economics, noted that institutions consider the regulatory clarity of XRP, its long operational history, and its market position as attractive components for exposure to index funds and retirement accounts.
He stated that the sudden increase in inflow is due to structural access rather than reactive trading behaviors. The resolution of Ripple's legal dispute with the SEC in August provided another catalyst, as the decision confirmed that XRP does not classify as a security. Ripple still had to pay a $125 million fine for previous violations of securities laws, but the decision removed a major obstacle for regulated financial platforms.
XRP gains strength by expanding market access.
Market observers point to a shift in how XRP circulates in traditional financial channels. Retirement accounts, brokerage platforms, and institutional trading desks can now access XRP through large ETF providers, including Vanguard. ETF issuers locked in hundreds of millions of dollars in XRP at a time when its spot price is near $2. This trend places XRP within the same structural channels that drove the adoption of Bitcoin and Ethereum.
Ripple continues to diversify its business with acquisitions like Hidden Road and GTreasury, although it has not announced a timeline for its IPO. Investors now have exposure protected against losses while awaiting developments that may influence Ripple's future role in the market.
Remember folks, that what is said here does not represent a recommendation to buy, sell, or hold assets.
Thank you all!
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