Ripple has raised another 500 million USD. Are investors buying $XRP at a discount?

Author: Steven Ehrlich

Translation: Deep Tide TechFlow

Ripple has completed a $500 million financing round at a valuation of $40 billion, but it already owns $80 billion worth of XRP.

Ripple Labs recently announced the completion of a $500 million funding round, with investors including well-known institutions such as Brevan Howard, affiliates of Citadel Securities, and Marshall Wace. Additionally, prominent crypto investment firms Galaxy and Pantera participated in this round.

But what exactly did investors get for this $500 million?

Recently, Ripple has been actively acquiring companies. Over the past few months, Ripple acquired custody platform Palisade, prime broker Hidden Road valued at $1.25 billion, and stablecoin infrastructure platform Rail. Furthermore, Ripple launched its own stablecoin RLUSD, which has surpassed a market cap of $1 billion. Meanwhile, Ripple’s XRP token is expected to launch the first U.S. spot ETF (Exchange-Traded Fund) next week and plans to apply for a national bank charter with the Office of the Comptroller of the Currency.

Despite Ripple’s rapid recent growth, it’s not easy to justify its $40 billion valuation. Especially considering that the XRP Ledger generates less than $200,000 in monthly revenue from transaction fees. So, what is the underlying logic here?

According to multiple anonymous investors and venture capitalists interviewed by Unchained, this funding round is more about acquiring Ripple’s XRP assets, possibly at a significant discount below the current spot price.

“[This company] is worthless outside of its XRP holdings. No one uses their technology, and there’s no activity on their network or blockchain,” said a well-known venture capitalist.

Another investor added, “Ripple’s equity itself might not be worth much, let alone reaching a $40 billion valuation.”

XRP Wealth

While Ripple Labs may not be the highest-valued company in the crypto industry, it might be one of the wealthiest. At the company and blockchain’s inception, as part of an early distribution strategy, Ripple Labs was allocated 80 billion XRP out of a total supply of 100 billion, which is released quarterly via escrow accounts.

As of now, Ripple Labs still holds 3.476 billion XRP, with 1 billion released each month. Typically, 60%-70% of these tokens are re-locked, with the remainder used for operational expenses. At the current price of $2.32 per XRP, these tokens have a nominal value of approximately $80.63 billion.

Private XRP Digital Asset Treasury (DAT)?

If this investment is viewed as an investment in Ripple’s Digital Asset Treasury (DAT), it appears quite attractive to investors. Investing in a platform with a valuation of $40 billion that already holds $80 billion in assets is like buying at a 50% discount, with an mNAV (net asset value multiple) of only 0.5. In contrast, typical DAT investment proposals usually have an mNAV close to 0.7 or 0.8.

But it’s not that simple. Even if Ripple were willing and able to sell all its XRP on the spot market, reaching an $80 billion valuation would be nearly impossible. However, even applying a 50% discount to these assets—an estimate considered reasonable by an investor not participating in this round—means investors are buying at an mNAV of 1, with potential upside from Ripple’s recent activities and acquisitions.

All investors involved in this round declined to comment to Unchained regarding this investment, especially regarding Ripple’s holdings of XRP and their role in decision-making and pricing. Ripple also did not respond before the report was published.

However, an insider familiar with one of the participants revealed that these companies have had ongoing business relationships for years. Particularly in the payments sector—especially after the passage of the GENIUS Act in July and the market’s focus on stablecoins—investors are betting on multiple “horses” in this “race.”

Additionally, this insider hinted at Ripple’s massive treasury reserves, stating, “Even if they can’t build a successful business themselves, they can simply buy a company outright.”

Ripple’s Strategy: What’s the deeper meaning behind this funding?

Although Ripple did not respond to requests for comment, a former employee pointed out that this funding round provides multiple benefits for the company. First, it consolidates Ripple’s valuation of $4 billion for its shares traded on platforms like Carta. The individual mentioned that the company may have already spent over $1 billion repurchasing shares from early investors and employees.

Furthermore, this funding provides additional capital for further acquisitions without having to sell XRP—avoiding the market panic that could be triggered by such sales.

Ironically, this company, which has the strongest capital backing in the crypto space, may actually be facing a cash shortage.