Ripple's $500 Million Fundraise Highlights Wall Street’s XRP Concerns

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TLDR

Ripple raised $500 million in a funding round that valued the company at $40 billion.
Investors negotiated terms that allow them to sell shares back to Ripple at a higher predetermined price after three or four years.
Ripple would have to pay an annualized return of 25% if it opts to repurchase the shares.
Major institutional investors including Citadel Securities and Galaxy Digital participated in the funding round.
Ripple’s value is heavily reliant on XRP, which has been impacted by the recent downturn in the crypto market.

Ripple recently completed a $500 million fundraising round, securing a $40 billion valuation. However, the terms of the deal highlight Wall Street’s caution regarding Ripple’s XRP-heavy holdings. Major institutional investors, including Citadel Securities, Fortress Investment Group, and Galaxy Digital, participated in the round. These investors negotiated terms that allow them to sell their shares back to Ripple at a predetermined higher price after three or four years. This arrangement effectively guarantees profits unless Ripple goes public before then.

Ripple’s Investor Terms Reflect Market Caution

The terms of the latest funding round reveal the caution surrounding Ripple’s future. Investors have ensured that they can sell their shares back to Ripple at a higher price, providing a safety net against potential losses. If Ripple opts to repurchase the shares, it would have to pay an annualized return of 25%. This provision demonstrates the market’s wariness of Ripple’s dependence on its flagship asset, XRP.

Ripple’s value largely hinges on the performance of XRP, which the company held at $124 billion as of July. Despite Ripple’s efforts to diversify its offerings, XRP remains its most valuable asset. However, the recent downturn in the crypto market has taken a toll on the value of XRP.

XRP’s Price Behavior and Whale Activity

On December 7, 2025, Ripple made a noteworthy move by transferring 250 million XRP from one of its escrow wallets. The transaction, valued at over $520 million at the time, raised questions about the purpose of the transfer. Blockchain monitoring services such as Whale Alert and XRPScan confirmed that the transaction originated from a Ripple-controlled wallet. However, the destination address remains unlinked to any known exchange or institutional custodian, leaving the purpose unclear.

Ripple’s monthly escrow release cycle is an ongoing process. Each month, up to 1 billion XRP are unlocked, redistributed, re-locked, or held for future use. While this mechanism ensures a steady supply of XRP, it also creates market tension, especially when large XRP holders, or “whales,” sell their holdings. Recently, whales sold over 390 million XRP in a single week, increasing supply and adding selling pressure.

Despite Ripple’s disciplined management of its XRP supply, market forces are still a factor. XRP’s price has recently hovered around the $2 psychological level. This price level reflects a balance between supply-side pressure and consistent demand from holders. Long-term investors have shown growing conviction, with a noticeable increase in the share of XRP held for 1-2 years.