Ripple's $2.4 Trillion XRP Buyback and Its Implications for Institutional Investors

In late 2024, a bold proposal emerged from the crypto world: GAM Investments urged SBI Holdings, Japan's largest financial institution, to execute a $2.4 trillion XRP buyback program. This move, modeled after MicroStrategy's Bitcoin accumulation strategy, aims to align SBI's market valuation with the true value of its crypto assets. SBI's indirect stake in Ripple is valued at over JPY 1.6 trillion ($10–12 billion), far exceeding its current market cap of JPY 1.2 trillion, according to a GAM proposal. By repurchasing XRP using cash flow from its banking and securities businesses, SBI could reduce the token's circulating supply, potentially driving up its price while enhancing shareholder value, as a CryptoNews report notes.

Strategic Rationale: A Vote of Confidence in XRP's Utility

The buyback proposal is more than a financial maneuver-it's a signal of confidence in XRP's long-term value. Ripple CTO David Schwartz has consistently emphasized XRP's role as a bridge asset in cross-border payments, enabling fast, low-cost currency exchanges, as he told NewsBTC. Unlike speculative tokens, XRP's utility is embedded in real-world financial workflows, from remittances to liquidity solutions. This utility, combined with Ripple's global network spanning 90+ markets and 55+ currencies, creates a durable demand for XRP that transcends market cycles, according to Ripple's Q3 report.

GAM's proposal also underscores XRP's growing institutional appeal. SBI's current undervaluation-its crypto assets are worth more than its stock-reflects a broader market failure to price crypto holdings accurately. By buying XRP, SBI could force a re-rating of its balance sheet, much like MicroStrategy did with Bitcoin. GAM estimates SBI's true net asset value (NAV) could reach JPY 3.9 trillion ($24–26 billion) post-buyback, per the GAM proposal. This would not only benefit SBI shareholders but also validate XRP as a strategic asset class.

Regulatory Clarity: A Catalyst for Institutional Adoption

Regulatory uncertainty has long hindered institutional investment in crypto. However, a pivotal 2023 court ruling confirmed that XRP is not a security when sold to the public, removing a major barrier to adoption. This clarity has already spurred interest in XRP-based investment products, with ETFs from Bitwise, Canary, and 21Shares gaining traction, as noted in Ripple's Q3 report. For institutional investors, the buyback proposal adds another layer of legitimacy: SBI's $2.4 trillion NAV estimate implicitly assumes XRP's value will appreciate, signaling that major financial players see no regulatory roadblocks ahead.

Implications for Institutional Investors

The proposed buyback has three key implications for institutional investors:

1. Price Appreciation Potential: AI models suggest XRP could reach $15–$20 by 2030, driven by reduced supply and increased demand from institutional adoption (as argued in the GAM proposal). While $100 remains speculative, the $5–$20 range is supported by utility-driven demand and growing ETF interest noted in Ripple's Q3 report.
2. Portfolio Diversification: XRP's unique role in cross-border payments offers a hedge against macroeconomic volatility. Unlike Bitcoin, which is often seen as a store of value, XRP's utility in financial infrastructure makes it less correlated with traditional assets.
3. Regulatory Alignment: The 2023 court ruling and SBI's buyback proposal indicate a maturing regulatory environment. Institutions can now allocate to XRP with greater confidence, knowing it's not classified as a security and is backed by institutional-grade strategies.

Conclusion: A New Era for XRP

Ripple's XRP is no longer just a speculative asset-it's a cornerstone of global financial infrastructure. The proposed $2.4 trillion buyback by SBI Holdings is a watershed moment, signaling that institutional investors are beginning to treat XRP as a strategic asset. For those willing to look beyond short-term volatility, the combination of regulatory clarity, utility-driven demand, and institutional-grade strategies makes XRP an attractive long-term bet.

As the crypto market matures, XRP's journey from niche token to institutional staple will likely mirror Bitcoin's early adoption curve-but with a critical difference: XRP's value is already being used to power the global economy.