Quick Takeaways
- Wall Street firms invested $500M in Ripple but demanded strict downside protections.
- Investors viewed Ripple’s valuation as 90% tied to XRP held in treasury.
- XRP’s recent decline and ETF inflows add new complexity to Ripple’s market position.
Ripple’s Record Fundraise Came With Heavy Conditions
Ripple’s $500 million share sale attracted major Wall Street institutions, but only after investors locked in protections rarely seen in late-stage tech deals.
According to Bloomberg, the $40 billion valuation pushed several funds to treat the round more like a structured credit deal than a typical private raise.
Citadel Securities, Fortress Investment Group, Marshall Wace, Brevan Howard–linked funds, Galaxy Digital, and Pantera Capital all participated.
Yet many viewed Ripple’s value as overwhelmingly tied to a single volatile asset.
Investors saw Ripple as 90% XRP Exposure.
Multiple institutions concluded that Ripple’s net asset value was effectively 90% XRP.
Ripple’s treasury held $124 billion worth of XRP in July, based on market prices at the time.
That concentration raised concerns among investors who wanted guardrails before committing capital.
They treated the investment as a high-risk bet wrapped in crypto volatility, not as conventional equity.
This led to negotiations that produced unusually strong downside protections.
Wall Street Secured a Synthetic Floor Under Its Capital
Funds secured three layers of protection to offset the XRP-heavy valuation:
- A right to sell shares back to Ripple after 3–4 years with a 10% annualized return.
- A 25% annualized return if Ripple forces a buyback.
- A liquidation preference that places new investors ahead of older shareholders.
These protections effectively created a safety net under investors’ capital.
The terms resemble structured credit strategies more than venture capital.
This structure is becoming more common as traditional finance seeks stability in crypto.
Notably, XRP has fallen roughly 40% since its July peak as the broader market corrected.
That decline highlights the risk investors sought to mitigate.
ETF Momentum and Legal Clarity Add New Dynamics for XRP
Despite recent volatility, XRP ETFs in the U.S. continue to attract strong inflows.
Spot XRP funds are on track to surpass $1 billion in net investments, supported by a 15-day inflow streak.
The momentum follows the resolution of Ripple’s court case with the SEC.
The ruling clarified XRP’s regulatory status, improving institutional confidence.
Ripple has not yet responded to media requests regarding Bloomberg’s reporting.
Emails sent to the company’s press channels went unanswered as of Monday morning.
With Wall Street recognizing Ripple as a high-value but high-risk asset play, the company’s next moves will shape how traditional investors approach large crypto treasuries in future fundraising rounds.