Move over Bitcoin. XRP is becoming increasingly attractive to companies stockpiling crypto.
On Tuesday, Webus International, a Chinese firm listed on the Nasdaq, said it plans to build a $300 million XRP treasury, according to a filing with US regulators.
It’s a big move for the ride-hailing startup given it sports a market capitalisation of $54 million.
Yet it isn’t the only firm to pile into XRP, the cryptocurrency linked to Ripple.
Last week, Saudi-backed VivoPower said it would stockpile $121 million worth of XRP.
Sayor’s coattails
Other companies are turning to Solana’s SOL token and even Ethereum. On May 27, SharpeLink Gaming announced a $425 million Ethereum treasury organised by Consensys and other investors.
Companies are riding the coattails of a trend that Michael Saylor, the executive chairman of Strategy, kicked off in August 2020 — amassing Bitcoin treasuries.
Formerly known as MicroStrategy, Saylor’s firm has been relentlessly adding Bitcoin to its balance sheet. The company holds more than 580,000 Bitcoin worth about $60 billion.
GameStop and Metaplanet have followed Strategy’s model, accumulating 8,888 Bitcoin and 4,710 Bitcoin respectively.
Even President Donald Trump’s media venture wants in — it plans to purchase $2.5 billion in Bitcoin for its coffers.
New strategy
But there’s a twist.
First, the funding. Instead of issuing convertible debt to raise money to buy cryptocurrencies — Saylor’s preference — Webus will fund the shopping spree with loans and credit facilities.
VivoPower, meanwhile, raised private equity with backing from a Saudi prince.
Then there’s the infrastructure. According to Webus’s filing with the SEC, the company plans to integrate Ripple’s payment network, along with using the XRP ledger for international payments.
Store of value
By contrast, Bitcoin treasury companies like Strategy and its entourage of copycats treat their Bitcoin stack as a balance sheet hedge.
They don’t use Bitcoin to pay employees, settle trades, or process transactions.
For them, Bitcoin is just a store of value.
Indeed, there’s only one Bitcoin treasury company that wants to use the network as something more than digital gold — Jack Dorsey’s Block.
The firm, which holds about $261 million in Bitcoin, is rolling out Bitcoin payments on Square, another Dorsey-led company.
Dorsey has said that if Bitcoin doesn’t turn into a payments system, it will fail.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at [email protected].
