XRP Dumps 10% Despite Ripple’s $1.25B Prime Brokerage Acquisition
Ripple, an American fintech business, has purchased the prime broking, clearing, and financing platform Hidden Road, but this has not prevented another XRP slump.
On April 8, Ripple announced the acquisition of Hidden Road for $1.25 billion, describing the transaction as one of the largest in cryptocurrency history.
Ripple further claimed that the acquisition made it the first cryptocurrency company to own and run a worldwide, multi-asset prime broker. Hidden Road clears $3 trillion yearly across markets for more than 300 institutional clients.
huge prime brokers assist huge hedge funds and institutional investors with their day-to-day activities, such as clearing, securities lending, and leveraged trade execution.
“But the price tag isn’t what’s most important,” Brad Garlinghouse, the company’s CEO, said. “It’s that this deal marks a once-in-a-lifetime opportunity for crypto to access the largest and most trusted traditional markets, and vice versa.”
Inflection Point for Crypto Adoption
Garlinghouse noted that this is the money and activity “that will tap into XRP and the XRP Ledger’s bread-and-butter – instant, efficient, scalable, and low-cost movement of value.”
He also stated that instead of waiting 24 hours to settle trades via fiat rails, Hidden Road will use XRPL to clear a part of trades. It will also employ RLUSD, the firm’s stablecoin, as collateral for its premier broking services, which include cross-asset crypto and traditional instrument trading, he stated.
“With this deal and the backing of Ripple’s significant balance sheet, Hidden Road will exponentially expand its capacity to service its pipeline and become the largest non-bank prime broker globally.”Garlinghouse also stated that we are at a “inflection point” for the next phase of crypto asset adoption, and that the US market is “effectively open for the first time due to the former SEC’s regulatory overhang coming to an end.”
However, the company has abandoned plans for an initial public offering.
XRP Price Tanks
Despite the announcement, Ripple’s native coin, XRP, has fallen by almost 10% in the last 12 hours. However, this is ascribed to a broader crypto market downturn as investors evacuate high-risk assets amid economic fears worsened by Donald Trump’s global trade war.
The asset slid from an intraday high of just under $2 to $1.73 during the Wednesday morning Asian trading session, as crypto markets turned red once more.
XRP has dropped about 50% of its value since its all-time high-equaling rise in mid-January, but it is still one of the best-performing digital currencies this year. The cryptocurrency market fell more than 7% on Wednesday as Trump’s tariffs, including a hefty 104% on China, went into effect.
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