In early November, key Wall Street players decided to invest $500 million in the Ripple project. This amount will enable Ripple to surpass a $40 billion valuation, while imposing very strict safeguards to protect their investment.
Ripple: An Investment with Crypto Safeguards
Since its launch in 2012, Ripple has clearly focused its ambitions on the banking sector and traditional finance. This strategy is currently paying off, particularly since the U.S. SEC dropped its charges related to the management of the XRP cryptocurrency.
This decision quickly caught the attention of key Wall Street players, such as Citadel Securities and Fortress Investment Group, prompting them to invest $500 billion in this crypto company in early November.
This was a golden opportunity for Ripple to secure the support of leading financial players, even though its president, Monica Long, was quick to point out that the company did not actually need these funds to continue its record expansion throughout 2025.
This high-profile venture has just revealed what goes on behind the scenes in a Bloomberg article detailing the significant safeguards imposed by these investors to protect themselves in the event of a crypto market downturn. This is particularly noteworthy given that “two of the funds that invested estimated that at least 90% of the company’s net asset value came from the XRP token .”
Put option with guaranteed return and “liquidation preference”
As a reminder, Ripple holds a supply of XRP in an escrow account currently estimated at 34.5 billion units according to the xrpscan website, or approximately $70 billion. This is a significant amount, though it has nearly halved since last July ($125 billion), when the price of XRP hit an all-time high of $3.65.
Ripple’s XRP has fallen more than 40% since its last peak
A drop of more than 40% offers a whole new perspective on the options available to Wall Street investors, especially considering that this involves the ability to sell their shares back to Ripple after 3 or 4 years with a guaranteed annualized return of 10%, unless the company goes public during that period.
If Ripple decides to repurchase these shares, it will have to offer an annualized return of 25% in exchange. In any case, these VIP investors also benefit from a “liquidation preference” clause designed to guarantee them priority over other shareholders in the event of a sale or bankruptcy.
