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Pundits have begun speculating why the recent Ripple funding round that pushed its valuation to $40 billion does not include the firm’s XRP escrow holdings.
Ripple’s $40B Valuation
For context, early last month, Ripple announced a $500 million secondary market share sale, valuing the company at $40 billion. This marked the highest valuation for a privately held crypto firm.
Notably, the round, led by investors including Citadel Securities and Fortress Investment Group, emerged as a share sale at $175 per share, a 135% premium over the past secondary market price of approximately $74 per share.
Meanwhile, the latest reports from Bloomberg confirmed that the terms of the deal allowed early investors and new participants to secure profits via buyback protections. Specifically, shareholders can sell shares back to Ripple after three to four years at a guaranteed 10% annualized return, unless an IPO occurs before that time.
XRP Escrow
Interestingly, in a 2024 report, Houlihan Lokey, a leading global investment bank, linked Ripple’s valuation directly to XRP price due to the company’s substantial XRP holdings. Their valuation model was largely impacted by XRP price scenarios, which determined the worth of Ripple’s XRP holdings in each case.
However, XRP community figures have pointed out that Ripple’s latest $40 billion does not account for the company’s large XRP stack, which currently has a value of nearly $80 billion at XRP’s current price of $2.06. Speaking on this, Digital Asset Investor (DAI) questioned why Ripple’s valuation fails to include the firm’s XRP holdings.
Responding to this, Brad Kimes of Digital Perspectives suggested that this may be because Ripple does not solely own the entire XRP balance within the escrow. He pointed out that an escrow puts the assets in the hands of a neutral third party, and Ripple simply manages the process.
Great question. Maybe because the XRP escrow doesn`t belong to Ripple solely.
Escrow by definition is a third party holding funds in a neutral account.
Ripple is the steward of the escrow the same way that a Title Company doesn`t own the property you are buying from a seller… https://t.co/WyLOCKiSfY— Digital Perspectives (@DigPerspectives) December 8, 2025
Kimes compared it to how a title company handles a property transfer without owning the property itself. Because of this setup, he said Ripple keeps the escrowed XRP off its books since some of those funds belong to other parties, not the company. However, this remains highly speculative, as Ripple has confirmed it.
The closest a Ripple executive has come to suggesting something similar was when CTO David Schwartz responded to questions about Ripple being able to liquidate the escrow at any time. Specifically, Schwartz confirmed that Ripple could indeed sell the rights to the tokens in the escrow to another entity.