Key Takeaways
- Ripple raised $500M at a $40B valuation, backed by major institutions.
- Investors may effectively be buying discounted exposure to XRP.
- Ripple’s XRP holdings exceed $80B, dwarfing its operating income.
- The firm’s expansion and stablecoin pivot suggest a strategic liquidity play.
Ripple $500 Million Raise Raises Bigger Questions
Ripple Labs’ recent $500 million funding round has sparked controversy across the crypto world. The company’s $40 billion valuation has many wondering: are investors truly buying into Ripple’s business — or just its massive XRP holdings at a steep discount?
Backed by big names like Brevan Howard, Citadel Securities affiliates, and Marshall Wace, the round also included crypto veterans Galaxy and Pantera. But the key question remains: what exactly did investors purchase for half a billion dollars?
Also Read: What Is Ripple Labs?
The $80 Billion XRP Treasury Behind Ripple
Ripple Labs may be the richest company in crypto — not because of its revenues, but its XRP stash. The firm was allocated 80 billion XRP when the blockchain launched and still controls 34.76 billion tokens, valued around $80.6 billion at current prices.
This structure makes Ripple look less like a fintech firm and more like a digital asset treasury (DAT). With a $40 billion valuation against $80 billion in assets, investors might be effectively buying in at a 50% discount — an mNAV (multiple to net-asset value) of just 0.5.
Also Read: How XRP Could Revolutionize Corporate FX Hedging—and Hit $25
While Ripple can’t liquidate all its XRP without crashing the market, even a 50% markdown still leaves significant upside — especially with its recent acquisitions and the expected XRP ETF launch in the U.S.
A Strategic Move or Desperate Liquidity Play?
Ripple has been aggressively expanding, acquiring Palisade, Hidden Road, and Rail, while launching its RLUSD stablecoin, which recently surpassed $1 billion in circulation. The firm is also applying for a U.S. national bank charter, signaling ambitions far beyond crypto.
Still, critics argue the $40 billion valuation is hard to justify for a business that generates less than $200,000 a month in fees. One venture capitalist bluntly noted, “Ripple isn’t worth anything outside of XRP holdings.”
The funding may therefore be less about growth capital and more about avoiding XRP sales that could hurt market confidence. As one former employee told Unchained, “Ripple may be the best-capitalized company in crypto — but it’s also cash-poor.”
