Ripple’s post-SEC rebound is drawing Wall Street backing, including a $40 billion valuation deal with downside protection— and some investors betting on XRP. It has been a long and arduous journey for Ripple. After emerging from a multiyear battle with the US Securities and Exchange Commission, the blockchain-based payments and infrastructure company is pressing ahead with broad ambitions to unify custody, treasury and prime-brokerage services, each underpinned by blockchain technology and stablecoins. Despite the bruising legal fight and the reputational damage that came with it, Ripple has still managed to win over some of Wall Street’s biggest players. This week’s Crypto Biz looks at how Ripple secured a striking $40 billion valuation, and why some of its backers are quietly placing bets on an XRP surge.

In November, Ripple raised $500 million at a valuation of $40 billion, attracting investors including affiliates of Citadel Securities, Fortress Investment Group and funds tied to Brevan Howard, Pantera Capital, and Galaxy Digital. New reporting now sheds light on how the deal came together. According to Bloomberg, Ripple secured commitments by offering investors substantial downside protection. The terms allowed participating funds to sell their shares back to Ripple after three or four years for a guaranteed annualized return of 10%. Ripple also retained the right to repurchase those shares during the same window, at an annualized return of 25% for investors. Ripple has since broadened its strategy, pushing deeper into the stablecoin market and pursuing acquisitions in brokerage and treasury management. Still, sources told Bloomberg that some backers were motivated not only by the company’s expansion plans but also by expectations for the future performance of XRP. Ripple’s RLUSD stablecoin has grown to a market cap of more than $1 billion.

Elsewhere in the crypto landscape, WisdomTree has rolled out a new options-income strategy through a tokenized fund. This move marks a significant step in merging traditional finance with blockchain innovation. WisdomTree is bringing a complex options strategy on-chain with a new tokenized fund designed to track the price and yield performance of the Volos US Large Cap Target 2.5% PutWrite Index. The fund, called the WisdomTree Equity Premium Income Digital Fund, is now available under the token ticker EPXC and the fund ticker WTPIX. The Volos benchmark is modeled on a “put-writing” strategy, in which the index sells cash-secured put options to generate income. Instead of writing options directly on the S&P 500, the strategy uses contracts tied to the SPDR S&P 500 ETF Trust (SPY), allowing it to collect option premiums as the seller. This launch gives volatility-wary investors a way to access a put-writing strategy through an on-chain fund.

In another notable development, Bitwise Asset Management’s 10 Crypto Index Fund (BITW) has made a significant transition from the over-the-counter market to NYSE Arca. This move broadens its visibility and opens the door to greater institutional participation. The fund is now available as an exchange-traded product. BITW provides diversified exposure to the 10 largest crypto assets by market capitalization, including Bitcoin (BTC), Ether (ETH), Solana (SOL), and XRP. According to Matt Hougan, Bitwise’s chief investment officer, “Most investors we meet are convinced crypto is here to stay, but they don’t know who the winners will be or how many will succeed.” The index approach is a way for people to invest in the thesis without having to predict the future. An NYSE Arca listing may help BITW attract investors who are hesitant to buy crypto directly through exchanges.

Meanwhile, Bitcoin treasury company Twenty One Capital has made its public debut on the New York Stock Exchange. This marks a notable step in the growing institutional push into digital assets. The listing follows the company’s merger with Cantor Equity Partners. Now trading under the ticker XXI, Twenty One Capital holds more than 43,000 BTC, valued at nearly $4 billion. CEO Jack Mallers stated, “Bitcoin is honest money. That’s why people choose it, and that’s why we built Twenty One on top of it.” Backed by Cantor Fitzgerald, Tether, Bitfinex, and SoftBank, Twenty One Capital has exceeded its Bitcoin accumulation targets after a series of large purchases throughout the year.

The landscape for crypto continues to evolve, with traditional finance increasingly intersecting with blockchain technology. Ripple’s resurgence is a testament to the growing acceptance of cryptocurrencies among institutional investors. The bullish outlook on XRP, combined with innovative financial products like WisdomTree’s tokenized fund and Bitwise’s index fund, highlights a transformative shift in how digital assets are viewed and utilized in the broader financial ecosystem. As more institutional players enter the space, the future looks promising for both Ripple and the crypto industry as a whole. Crypto Biz serves as your weekly pulse on the business behind blockchain and crypto, providing insights into the latest trends and developments in this dynamic market.