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Houlihan Lokey, a global investment bank, dropped a bombshell report: Ripple’s valuation hinges squarely on XRP’s price, directly tying the blockchain firm’s fate to its controversial cryptocurrency.
A Ripple in Time: An overlooked February 2024 report, “Digital Assets: How Can Valuation Differ From Traditional Assets?”, has resurfaced within the XRP community thanks to eagle-eyed researcher SMQKE, sparking fresh debate.
Valuing Blockchain Firms Contrasts with Traditional Methods
Ripple’s valuation: a blockchain enigma. The report argues that standard financial metrics fail to capture Ripple’s true worth, suggesting its value is overwhelmingly tied to its XRP cryptocurrency reserves, overshadowing the company’s equity.
Forget traditional equity! Savvy blockchain investors are playing a different game, often securing both equity and token warrants. Why? Because in the crypto world, tokens are where the real value explodes. Take Ripple, for example a prime illustration of how this two-pronged investment strategy can pay off big.
Houlihan Lokey Ties Ripple Valuation to XRP Price
Ripple’s payment network pulses with the energy of the XRP Ledger (XRPL), its blockchain foundation. XRP, the network’s lifeblood, fuels every transaction. Financial advisors at Houlihan Lokey argue this makes XRP the keystone of Ripple’s economic engine, the bedrock upon which its value is built. When this report surfaced, XRP danced around the $0.60 mark, hinting at the potential within.
Ripple’s war chest: Houlihan Lokey estimates a cool $1 billion in cash and securities, bolstered by a staggering 46 billion XRP tokens. But here’s where it gets interesting: despite no official connection, platforms like Linqto and EquityZen are trading Ripple shares. Adding fuel to the fire, Ripple unveiled a share buyback program earlier this year, injecting even more intrigue into the digital currency landscape.
Ripple’s true worth? A new report dares to peek behind the curtain. Buckle up, because its valuation model paints not one, but three possible futures. The first? A secondary-market snapshot pegs Ripple at $4.5 billion. Sounds impressive, right? But that translates to a mere $0.076 per XRP, revealing a staggering 84% discount on its equity.
Houlihan Lokey Ties Ripple Valuation to XRP Price
Ripple’s value hinges on wildly different estimates. One, anchored to their tender offer, suggests an $11.3 billion valuation – a mere $0.224 per XRP, slashing its worth by 60%. Another, betting on XRP’s $0.60 market price, paints a far rosier picture: Ripple’s theoretical worth skyrockets to $28.6 billion, thanks to its XRP holdings. The question is: which valuation reflects reality?
Houlihan Lokey flags a critical link: wildly fluctuating token values can significantly impact a company’s overall worth. Further complicating matters, new accounting rules FASB ASU 2023-08 demand crypto assets be reported at their ever-shifting fair market value, adding another layer of complexity for businesses navigating the digital frontier.
Ripple’s XRP stash, currently a hidden asset, could explode onto its balance sheet if accounting rules changed. Instead of the $4.5 to $11.3 billion whisper number whispered in private equity circles, imagine a $28.6 billion valuation screaming from their financial statements. That’s the power of marking to market – a financial earthquake reshaping Ripple’s perceived worth.
Possible Ripple Valuation Today Using Same Methodology
Here’s the kicker: Run the numbers today, and the picture explodes. Ripple’s sitting on a mountain of roughly 40 billion XRP. The catch? Only 5 billion are readily available. The remaining 35 billion are locked away in escrow, waiting for their moment.
Ripple’s XRP surge catapults its valuation into the stratosphere. At an XRP price of $2.30, the company’s holdings translate to a staggering $92 billion. Bolstered by another $1 billion in cash and securities, Ripple now boasts a theoretical valuation of approximately $93 billion. This figure dwarfs Houlihan Lokey’s early 2024 estimate by a factor of three, signaling a monumental shift in the company’s perceived worth.
Ripple Swell 2025 ignited with the news: a colossal $500 million investment catapulted the company’s private valuation to a staggering $40 billion.
While Ripple CEO Brad Garlinghouse hinted at a potential IPO earlier this year, those whispers have faded. Ripple President Monica Long recently poured cold water on the speculation, confirming an IPO isn’t on the horizon and no timeline exists. So, for now, forget the ticker symbol – Ripple’s focus lies elsewhere.
Thanks for reading Ripple Valuation is Directly Linked to XRP Price: Global Investment Bank
