Ripple's $40B Valuation: Is XRP the Core or the Consequence?

In the ever-evolving landscape of blockchain and fintech, Ripple's $40 billion valuation has sparked intense debate. Is this valuation a reflection of XRP's enduring utility, or a testament to Ripple's broader transformation into a financial infrastructure powerhouse? To answer this, we dissect Ripple's revenue streams, strategic acquisitions, and institutional partnerships to determine whether XRP is the core of its value proposition-or merely a consequence of its ecosystem's growth.

The Non-XRP Engine: Diversification as a Strategic Pillar

Ripple's revenue model has evolved beyond XRP, with enterprise software licensing and transaction fees from its RippleNet infrastructure forming the backbone of its business. Financial institutions pay usage-based fees tied to cross-border transaction volumes, creating a scalable, recurring revenue stream, as noted in a Timestabloid analysis. This model incentivizes long-term engagement with banks and payment providers, positioning Ripple as a critical node in global finance.

The company has further diversified through strategic acquisitions. For instance, Ripple Prime-a digital asset prime brokerage platform-was launched via the acquisition of Hidden Road, enabling institutions to execute over-the-counter (OTC) trades in major digital assets, according to a Yahoo Finance report. Similarly, the acquisition of Palisade has fortified Ripple's custody and payments infrastructure, integrating secure wallet-as-a-service technology, as detailed in the same report. These moves signal a deliberate pivot toward becoming a crypto-native financial infrastructure provider, competing with traditional players like SWIFT.

Another non-XRP revenue driver is Ripple USD (RLUSD), a stablecoin with a market cap exceeding $1 billion. RLUSD facilitates cross-border payments with monthly transaction volumes surpassing $860 million, as reported by a Coinotag article, reducing reliance on XRP for liquidity. This diversification is critical: while XRP remains a key asset, Ripple's valuation is increasingly tied to its ability to offer end-to-end financial solutions.

XRP: Infrastructure Asset or Speculative Token?

Despite its diversification, XRP remains a linchpin of Ripple's strategy. CEO Brad Garlinghouse has positioned XRP as an "infrastructure asset" that connects global value flows, enabling cross-border payments and liquidity, according to a Coinotag analysis. This narrative contrasts with XRP's historical role as a speculative token, emphasizing its utility in high-value transactions like global debt and derivatives, as noted in the same Coinotag analysis.

However, XRP's valuation dynamics are complex. The CTO, David Schwartz, revealed that Ripple can sell or transfer escrowed XRP tokens, which are currently locked but could unlock significant market value, as disclosed in a Coinpedia report. With 35 billion XRP in escrow, their future liquidity could reshape perceptions of the token's supply and influence long-term valuation models.

Short-term price volatility persists, though. XRP recently dipped below $2.27, trading below its 100-day moving average, according to a Investing.com analysis. Analysts remain divided: some predict a rally to $27, while others anticipate a temporary dip before a potential ETF-driven surge, as reported in the Coinpedia report. The pending approval of XRP ETFs-backed by Bitwise, VanEck, and Canary-could attract institutional and retail investors, further cementing XRP's role in global finance, as highlighted in the Coinotag analysis.

Valuation Drivers: Funding, Institutional Confidence, and Future Potential

Ripple's $40 billion valuation is underpinned by a $500 million funding round led by Fortress Investment Group, affiliates of Citadel Securities, and Pantera Capital, as detailed in a Blockonomi report. This influx of capital validates Ripple's growth strategy, particularly its expansion into treasury, custody, and prime brokerage, as noted in a CryptoBasic analysis. The valuation also reflects the company's processed payment volume: over $95 billion in cross-border transactions in 2025, as reported in a CoinEdition analysis.

Yet critics argue that the valuation outpaces current operational metrics. On-chain data shows XRP Ledger fees remain under $200,000 monthly, according to the CoinEdition analysis, while Ripple's non-XRP revenue streams-though growing-lack detailed financial breakdowns. Analysts like Vincent Van Code estimate that $95 billion in processed payments could generate $400 million in network fees, as noted in the CoinEdition analysis, but this remains speculative.

The valuation also hinges on Ripple's XRP holdings. Investors may benefit from acquiring these assets at a discount to market prices, as suggested in the CoinEdition analysis, a factor that could justify the $40 billion price tag. Meanwhile, Ripple's exploration of a $1 billion digital asset treasury via a SPAC, as reported in the Investing.com analysis, underscores its ambition to scale beyond XRP.

Sustainability: A Balancing Act

Ripple's valuation sustainability depends on its ability to balance XRP's legacy with its non-XRP innovations. While XRP remains a critical asset, the company's expansion into stablecoins, custody, and prime brokerage reduces its exposure to token price volatility. Institutional adoption-evidenced by partnerships with BBVA, DBS, and Société Générale-further strengthens its position, as detailed in the Yahoo Finance report.

However, risks persist. Regulatory scrutiny, particularly around XRP ETF approvals, could delay growth. Additionally, if Ripple's non-XRP revenue streams fail to scale, the valuation may face downward pressure. The key question is whether Ripple can maintain its dual identity: a blockchain innovator and a traditional financial infrastructure provider.

Conclusion: XRP as a Catalyst, Not the Core

Ripple's $40 billion valuation is a hybrid of XRP's utility and the company's broader ecosystem. While XRP remains a vital component-facilitating liquidity and cross-border payments-it is increasingly a catalyst rather than the core of Ripple's value. The company's strategic acquisitions, stablecoin innovation, and institutional partnerships suggest a sustainable path forward, even if XRP's price fluctuates.

For investors, the lesson is clear: Ripple's valuation is not solely about XRP. It's about the infrastructure it's building-and the future of global finance it aims to redefine.