The transaction priced Ripple at roughly $40 billion, the highest valuation ever given to a privately held digital-asset firm. The roster of participants reads like a who’s who of hedge fund powerhouses, including Citadel Securities and Fortress Investment Group. But the structure of the deal matters more than the valuation headline.
Rather than adopting a conventional venture capital format, the Wall Street buyers insisted on protections that shielded them from crypto’s trademark swings. Multiple funds negotiated the right to sell their shares back after several years at a guaranteed return, and Ripple agreed to give them senior priority if the company is ever acquired or faces financial distress.
That shift in deal dynamics says as much about Ripple as it does about the mood among large investors: institutions are entering crypto, but only on their terms.
A Company Shadowed by Its Token
Two funds privately concluded that Ripple’s fortunes are overwhelmingly linked to its enormous XRP holdings, estimating that as much as 90 percent of the company’s value stems from its token reserves. With XRP tumbling more than 40 percent from its July peak, that exposure loomed large — explaining why investors priced in contractual escape ramps.
Ripple points to its stablecoin efforts, prime brokerage business and widening acquisition portfolio as proof that it is evolving beyond its token roots. But the safeguards embedded in the deal suggest investors still see XRP as the gravitational center of the company.
A Booming Market With Fragile Foundations
The Ripple raise took place during one of crypto’s busiest fundraising years. PitchBook data estimates that venture and IPO inflows into digital assets reached around $23 billion in 2025. Meanwhile, Tether reportedly sought up to $20 billion, speaking with marquee backers from SoftBank to Ark Invest.
The momentum, however, masks turbulence. Newly-listed crypto firms — including stablecoin issuers and asset accumulators — have watched their share prices recoil. Even American Bitcoin Corp., co-founded by a member of the Trump family, collapsed more than 50 percent in minutes earlier this month.
In that environment, Ripple’s investors opted not for blind optimism, but contractual insulation.
Why the Guarantees Matter
Under the terms, shareholders can force Ripple to repurchase their stakes in three or four years and lock in a minimum 10 percent annual return if no IPO occurs. If Ripple initiates the buyback instead, it must pay 25 percent yearly. Bloomberg estimates suggest settling those obligations could cost Ripple roughly $732 million — funds that would otherwise be deployed for growth.
Analysts say structures like these often appear when buyers want upside without the risk profile typical of early-stage crypto deals. Kyle Stanford of PitchBook warned that such arrangements could strain Ripple’s liquidity, especially if several investors choose to exercise their rights at once.
Ripple Looks Ahead While Critics See the Same Risk
To counter its token-dependence narrative, Ripple has embarked on an expansion strategy, snapping up prime broker Hidden Road for $1.25 billion and treasury platform GTreasury for $1 billion. Executives argue that such diversification will gradually make XRP less central to its valuation.
Some investors share that thesis; others remain unconvinced. Even after recent declines, Ripple’s XRP reserves are still worth more than twice its $40 billion valuation — suggesting the market continues to judge the company through the lens of its token holdings.
As fintech banker Steve McLaughlin noted, financing that guarantees investor returns usually indicates the market does not view the firm as an unstoppable hyper-growth story — regardless of its headline valuation.