In a significant development in the world of cryptocurrencies, Ripple, a prominent crypto firm, has announced its plans to acquire prime broker Hidden Road for a whopping $1.25 billion. This acquisition is considered one of the largest deals in the history of the crypto industry and has caused a surge in the price of XRP, Ripple’s native token.
Ripple revealed in a press release that the acquisition of Hidden Road will make it the first crypto company to own and operate a global, multi-asset prime broker. Hidden Road is a rapidly growing prime broker that offers institutions a wide range of services, including clearing, prime brokerage, and financing across various asset classes such as foreign exchange, digital assets, derivatives, swaps, and fixed income. This move by Ripple comes on the heels of the launch of the first XRP ETF in the United States.
According to Ripple, the establishment of a core infrastructure is crucial for institutional adoption to propel the industry into the next phase of growth. Prime brokers play a vital role in bringing credibility and professional trading services from traditional finance to the digital assets arena. Ripple aims to leverage its unique position and strengths of XRP to accelerate its business, enhance its current solutions, and drive the adoption of digital assets among institutional customers.
Ripple’s CEO, Brad Garlinghouse, emphasized the importance of this acquisition in the context of the evolving digital asset landscape. Garlinghouse mentioned that the regulatory environment in the US is conducive to digital asset adoption, and the market is maturing to meet the needs of traditional finance. With these favorable conditions, Ripple is poised to transform the space and leverage its strengths to drive innovation and growth.
As part of the Hidden Road acquisition, Ripple stated that the deal reinforces the position of RLUSD, Ripple’s enterprise-grade USD-backed stablecoin, as a currency with real utility. The prime broker will leverage RLUSD as collateral across its products, making it the first stablecoin to facilitate efficient cross-margining between digital assets and traditional markets. Additionally, Hidden Road will migrate its post-trade activities to the XRP Ledger (XRPL) to streamline operations and reduce costs, positioning the blockchain as a leading player in institutional DeFi.
Looking ahead, Ripple plans to optimize costs and liquidity in its cross-border payments solution and provide custody services to Hidden Road’s customers in need of “bank-grade” digital asset custody. The acquisition is expected to close in the coming months, subject to regulatory approvals, and the XRP price has surged following the announcement, indicating positive market sentiment towards the deal. Investors are now eyeing the $2 level as a potential support level for XRP.
