In November, Wall Street made a significant $500 million investment in Ripple, boosting the company’s valuation to an impressive $40 billion. This agreement included safeguards that allowed investors to sell their shares back at predetermined returns and gave them priority over other shareholders if Ripple were to be sold or encounter financial difficulties.
The participants in this $500 million funding round included major players such as Citadel and Fortress Investment, alongside funds associated with Marshall Wace, Brevan Howard, Galaxy Digital, and Pantera Capital.
For several investors involved, the primary focus wasn’t on Ripple’s software or payment infrastructure but rather on the XRP token itself. Two of the funds estimated that nearly 90% of Ripple’s net asset value was derived from its XRP holdings.
By July, Ripple possessed approximately $124 billion worth of XRP tokens, much of which was subject to lockup periods and gradual release schedules. Since October 31st, XRP has declined by roughly 16%, marking a drop exceeding 40% from its mid-July peak amid one of the most severe market downturns since 2022.
Investors Push for Returns and Greater Influence
The investment contract granted buyers options allowing them to sell their shares back to Ripple after three or four years with a guaranteed annual return of 10%, unless an initial public offering occurs first. Additionally, Ripple holds the right to initiate buybacks during these periods but must offer a higher annual return rate of 25% if it chooses this route.
Kyle Stanford—director specializing in U.S. venture capital research at PitchBook—explained that such put options are uncommon and tend to appear more frequently among non-traditional venture capital firms.
Kyle also cautioned that these arrangements might pressure companies into either spending cash rapidly or seeking additional funding rounds just to satisfy investor rights obligations—potentially reducing available resources for everyday operations. If all buybacks were exercised after four years fully, it would cost Ripple around $732 million.
These contractual terms now coexist with fluctuating interest rates as trading desks incorporate exit risks into their quarterly financial models. Banks are monitoring these timelines meticulously across all departments.
Expanding Deals Amid Market Challenges
This substantial sale occurred during a year when cryptocurrency companies collectively raised about $23 billion through venture capital financing rounds and initial public offerings while Donald Trump returned as U.S. president.
This total excludes Tether’s ongoing efforts seeking up to $20 billion in funding; Tether has reportedly engaged in discussions with SoftBank Group Corp. and Ark Investment Management regarding potential investments. Meanwhile, stocks belonging to firms listed in early 2025—including Circle Internet Group along with various crypto-focused investment vehicles—have experienced sharp declines recently.
A notable example is American Bitcoin Corp., co-founded by Eric Trump; its share price plummeted over fifty percent within minutes on December second alone. Within Ripple itself, President Monica Long stated last November there is currently “no plan nor timeline” set for taking the company public via IPO while confirming they have repurchased more than one-quarter of outstanding shares already issued.
Differing from exchanges like Binance or Coinbase—which rely heavily on trading volumes—or stablecoin issuers like Tether earning revenue based on reserves backing its massive USDT supply valued at around $185 billion; much of Ripple’s worth remains tied directly to its control over XRP tokens alone.
Earlier this year (April), Ripplе announced plans tо acquire Hidden Road fоr about $1. 25 bіllіоn, followed bу а $1 bіllіоn deal іn October wіth GTreasury. An executive investor commented thаt thе value оf XRР hоldings аlmost еquаls Rіррlе’ѕ entire valuation whіlе another source mentioned disagreement frоm Citadel оvеr thаt assessment. Evens wіth recent mаrkеt сorrесtіons, Rірplе’s XRР assets rероrtedly stооd аrоund $83. 3 billioп &asof Sunday assuming no changes іn token quantity sіпсе late July.&nbѕро;&Prісes continue tο fluctuate daily across trading desks as market participants closely monitor exposure levels.<&/р>