How Wall Street Locked In Guaranteed Returns in Ripple’s $500M Share Sale

A Funding Round With Safety Locks

Ripple's latest funding round, where they raised $500 million at a $40 billion valuation, has sparked fresh discussion across the industry due to its unique deal structure, according to Bloomberg.

Several prominent names from traditional finance participated in the round, including Citadel Securities, Fortress Investment Group, Galaxy Digital, Brevan Howard, Pantera Capital, and Marshall Wace. These investors were positioned for success from the outset due to the specific terms of the deal.

This deal included safeguards that are rarely seen in such rounds. Investors secured the right to sell their shares back to Ripple after three or four years, with a guaranteed 10% annual return, provided the company does not go public first. Ripple also has the option to buy back the shares, but this would necessitate offering a 25% annualized return.

Furthermore, the investors benefit from a liquidation preference. This means they would be prioritized in receiving proceeds if a significant event, such as a sale or bankruptcy, were to occur.

The structure reflects Wall Street's desire for exposure to the crypto market while simultaneously demanding robust security and guaranteed returns.

XRP Continues to Shape Ripple’s Valuation

Another critical detail that emerged from the funding round is the significant role of XRP in Ripple's valuation. According to multiple funds, approximately 90% of Ripple’s net asset value is derived from XRP holdings. As of July, the company held $124 billion worth of the token, with a substantial portion still locked and subject to scheduled releases.

The market performance of XRP has added to the pressure. The token has experienced a decline of 26.16% over the last 60 days and more than 30% over the past 90 days, during a period that has been one of the most challenging selloffs since 2022.

Despite this drop, Ripple's XRP holdings were still valued at $83.3 billion as of Sunday, remaining comfortably above the valuation used in the recent share sale.

A Big Year for Crypto Fundraising

The Ripple deal arrives during a year where crypto companies have already secured $23 billion in funding. This activity is partly attributed to a more favorable political environment following Donald Trump's return to the White House. Reports also indicate that Tether is in talks to raise as much as $20 billion, attracting interest from major global investors.

However, the broader market landscape remains mixed.

Several crypto firms that went public in 2025, including Circle, have experienced significant declines in their share prices. Even American Bitcoin Corp., co-founded by Eric Trump, saw its value plunge by more than 50% within minutes on December 2.

In contrast, Ripple maintains that it has “no plan, no timeline” for an initial public offering (IPO).

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