Pre-Swell: What Is Ripple’s Investment and Acquisition Strategy?

Posted by on September 1, 2019 4:15 am
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Categories: analysis

Questions are legitimate after the Xpring / Dharma “blunder” what investment strategy Ripple is pursuing. Back in May 2018, Ripple announced the Xpring initiative which seemed to be focused on the development and promotion of XRP usage:

Every (Xpring) entrepreneur will use the digital asset XRP and the XRP Ledger, the open-sourced, decentralized technology behind XRP, to solve their customers’ problems in a transformative way.

Turns out that XPR sales (and holdbacks from escrows likely as well) flow into non-XRP related investments, such as Dharma:

Ripple CEO Brad Garlinghouse recently suggested that Dharma in fact is a proactive XRP investment:

Dharma says differently:

The community responded flabbergasted. Ripple CEO posting conflicting information is not only a severe PR faux pas. Take the class action lawsuit against Ripple which is based on concerns like noted above – referencing to misleading or false Twitter quotes. Ripple opponents are having a field day. Or that’s at least what many assume. Because maybe Garlinghouse knows a little bit more than we all do.

At the core of the issue lies the fact that Ripple is literally swimming in money thanks to increasing licensing revenues and, of course, XRP sales. Not getting into the discussion whether those sales suppress the token price, but one thing is clear: We outsiders really don’t have the slightest clue about the discussions Ripple is having. Rest assured they have the space’s best interest in mind.

Ripple’s huge war chest

Dharma will be pushing XRP development indirectly. And this is just one of the deals whose repercussions we outsiders are unable to grasp. The community can peacefully assume that Ripple keeps on signing a few contracts a week which ultimately will benefit XRP rails and usage.

Also, this being pre-Swell (which takes place November 7-8 in Singpore) we might expect one or the other announcement. Ripple CEO confirmed early August they’re looking to make further investments and acquisitions.

Speculation is ripe that one of the acquisitions is R3. Further down the road, when regulation on crypto becomes clear, Google and Amex are likely big names to openly use XRP solutions.

In fact, Ripple is working on “multiple” potential investments and acquisitions in the wake of the $30m investment in MoneyGram. Garlinghouse told Yahoo Finance:

We’re in a very strong position, our business is growing strongly, we have a strong balance sheet, and I intend to press our advantage.

Garlinghouse calls Ripple the “probably the largest investor in blockchain and crypto on the planet”. The company is currently in active discussions on “multiple” potential investments and acquisitions.

In the last 18 months they made about $500m of investments in the space. As a consequence, says Garlinghouse, “XRP volume will start to ramp in Q4 but really we’ll start to see more consequential volumes in Q1”.

Is this another “dozens of banks will use XRP by the end of 2018”-quote by Garlinghouse? Doesn’t seem like fake hyping, or does it. The next few months will tell. Suffice to say, we’re still in the crawl-phase. Once the “network effect” gathers momentum, then XRP will have own legs and start walking.