Ripple, one of the biggest names in the Cryptocurrency sector, recently bought Prime Brokerage Hidden Road for $ 1.25 billion, which underlines how decentralization and traditional finances officially enter.
Nic Puckrin, a crypto analyst and founder/CEO of the Coin Bureau, says that 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-in-house to close by the third quarter of this year are usually based in cash based, with a part paid in XRP tokens and wrinkle shares.
Hidden Road, which dealt with Fund transfer in 2024 $ 3 trillion, started in 2018 and a year when cryptocurrencies crashed worse than the DOT-Com Bubble.
Nowadays it’s a different scenario. “The attitude towards crypto has changed,” Puckrin told Crypto.news.
For example, XRP now has a market capitalization of around $ 126 billion. And Hidden Road will explore the use of blockchain technology for faster settlements, something that traditional financing companies still have to embrace.
The acquisition also follows the search from Hidden Road to capital after the first support of Castle Island Ventures, Coinbase Ventures and Citadel Securities.
For Perspectief we asked Puckrin what the combined company could look like and what it means for the digital assets industry in the long term.
Does Hidden Road Ripple strive to become a full-stack player for financial services?
Puckrin: I don’t think Ripple is trying to compete directly with established financial players such as JPMorgan Chase, but the ambitions may be even more elevating. With Hidden Road it gets control over essential financial infrastructure – a critical layer responsible for liquidity and settlement, a layer that even banks must use. It is therefore not a full-stack player for financial services, but an essential building block for all other full-stack players.
The use of XRP to finance the deal is partly unusual. What precedent has this set?
While M&A picks up, we could see many more projects that try to follow. Ripple uses XRP as a strategic treasury activ and reflects a high level of trust in this token. Smaller projects with less established tokens will certainly struggle if there is not much faith in their lifespan.
What statistics will you see to see if the migration of post-trade activity requires XRPL drives?
Resisting income from the transaction costs would indicate the increasing demand for the network. Bridging and settlement volume between XRPL and large Fiat Stablecoins can also be a clear indicator that absorbs the activity.
Until recently, Tradfi companies have taken over crypto companies. Why is the moment that Crypto is on the Buyside?
With the new American administration in power, the regulatory environment for Crypto has become much more favorable, which is exactly what they have waited for. We also see more and more crypto players in the US requesting IPOs. Markets may have fallen in the short term, but the attitude towards crypto has changed and that was the biggest obstacle that stood in the way.
Does the growing convergence between Crypto and Tradfi count the thinning of the decentralization ethos on which crypto is based? Or is this hybrid future inevitable?
I think the crypto eco system increasingly splits in two – “a story of two cryptos”, if you want. The shop side is still largely powered by speculation and short -term fads. But the institutional side has serious market players who come in and buy Bitcoin, launch new products and request IPOs. There is room for decentralization on the retail side, but of course not where institutions are involved. However, this is what is needed to push crypto in the mainstream.
Within we have a new competitive phase where crypto-native companies with the same regulatory and capital rules should play as traditional banks?
Yes, and that is only part of the evolution of crypto. There will be no regular adoption if crypto-native companies will not play according to the rules. But if they do that, it is a game because crypto is an innovative technology that can cause enormous improvements in older financial systems. It just has to do this within the existing frameworks.
