In a significant move, Ripple announced on Tuesday that it will acquire Hidden Road, a multi-asset prime broker, in a deal valued at $1.25 billion. This acquisition will be one of the largest deals made by a cryptocurrency company.
This is the second time this year that a cryptocurrency company has engaged in a deal worth over a billion dollars. This comes at a time when digital assets like Bitcoin are gaining more prominence under the leadership of U.S. President Donald Trump, who has vowed to be the 'crypto president.'
Brad Garlinghouse, the CEO of Ripple, stated that the U.S. market is effectively open for the first time due to the end of the previous regulatory suspension from the Securities and Exchange Commission, and that the market is maturing to meet traditional finance needs. Key intermediaries, such as Hidden Road, are essential for daily operations of clearing, securities lending, leveraged trading execution, and more. Large hedge funds and institutional investors often use such services.
Hidden Road is currently clearing $3 trillion annually across the markets and serves over 300 institutional clients. The acquisition by Ripple will enable Hidden Road to utilize Ripple's balance sheet to significantly expand its operations and become the largest non-bank global prime broker.
Upon completion of the deal, expected in the coming months, Ripple will become the only cryptocurrency company that owns and operates a global multi-asset prime broker.
The acquisition also enhances the utility of Ripple's dollar-backed stablecoin (RLUSD), as Hidden Road uses the stablecoin as collateral across its primary brokerage products. Ripple launched RLUSD, a stablecoin pegged to the U.S. dollar, last year in an attempt to disrupt a market dominated by Tether and USD Coin.