Ripple, one of the biggest names in the cryptocurrency sector, recently purchased prime brokerage Hidden Road for $1.25 billion, underscoring how decentralization and traditional finance are officially meshing.
Nic Puckrin, a crypto analyst and founder/CEO of The Coin Bureau, says the deal is indicative of this new trend and a positive for Ripple’s blockchain adoption and the price of XRP.
After all, the transaction — set to close by the third quarter of this year — will be mostly cash-based, with a portion paid in XRP tokens and Ripple stock.
Hidden Road, which handled $3 trillion in fund transfers in 2024, started in 2018 — a year when cryptocurrencies crashed worse than the dot-com bubble.
Today, it’s a different scenario. “The attitude toward crypto has changed,” Puckrin told crypto.news.
XRP, for example, now has a market cap of about $126 billion. And Hidden Road will explore using blockchain technology for faster settlements, something traditional finance firms have yet to fully embrace.
The acquisition also follows Hidden Road’s search for capital after initial backing from Castle Island Ventures, Coinbase Ventures, and Citadel Securities.
For perspective, we asked Puckrin what the combined company could look like and what it means for the digital asset industry in the long term.
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With Hidden Road, is Ripple aiming to become a full-stack financial services player?
Puckrin: I don’t think Ripple is trying to compete directly with established financial players like JPMorgan Chase, but its ambitions might be even more lofty. With Hidden Road, it’s gaining control of essential financial infrastructure—a critical layer responsible for liquidity and settlement, one that even banks need to use. So, it’s not a full-stack financial services player per se, but an essential building block for all other full-stack players.
Using XRP to finance the deal partially is unusual. What precedent does this set?
As M&A picks up, we could see many more projects trying to follow suit. Ripple is using XRP as a strategic treasury asset, reflecting a high trust level in this token. Smaller projects with less established tokens will certainly struggle more if there isn’t as much trust in their longevity.
What metrics will you be watching to see whether the migration of post-trade activity to XRPL drives demand?
Resign transaction fee revenues would point to rising demand for the network. Bridging and settlement volume between XRPL and major fiat stablecoins could also be a clear indicator that activity is picking up.
Until recently, TradFi firms have been acquiring crypto companies. Why is now the moment for crypto to be on the buyside?
With the new U.S. administration in power, the regulatory environment for crypto has become far more favorable, which is exactly what they have all been waiting for. We’re also seeing more and more crypto players filing for IPOs in the U.S. as well. Markets may be down in the short term, but the attitude toward crypto has changed and that was the biggest obstacle standing in the way.
Does the growing convergence between crypto and TradFi risk diluting the decentralization ethos that crypto was founded on? Or is this hybrid future inevitable?
I think, increasingly, the crypto ecosystem is splitting into two — “A Tale of Two Cryptos”, if you will. The retail side is still largely driven by speculation and short-term fads. But the institutional side has serious market players coming in and buying up Bitcoin, launching new products and filing for IPOs. There’s room for decentralization on the retail side, but obviously not where institutions are getting involved. However, this is what’s required to propel crypto into the mainstream.
Are we entering a new competitive phase where crypto-native firms need to play by the same regulatory and capital rules as traditional banks?
Yes, and that’s just part of crypto’s evolution. There won’t be mainstream adoption if crypto-native firms don’t play by the rules. But if they do, it’s game on because crypto is an innovative technology that can bring huge improvements to legacy financial systems. It just has to do so within the existing frameworks.
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