XRP drops 3% as Ripple announces $1.25 billion acquisition of prime brokerage firm Hidden Road

Ripple announced on Tuesday that it is acquiring prime brokerage firm Hidden Road to enhance its institutional offerings and increase the adoption of the RLUSD stablecoin and the XRP Ledger (XRPL). Despite the positives from the announcement, XRP continued to trade below $2, as the effects of the global trade war outweighed any optimistic sentiments.

Ripple to expand institutional offering with Hidden Road acquisition

Ripple confirmed that it will acquire prime brokerage firm Hidden Road for $1.25 billion in an attempt to expand its institutional offerings.

"For the crypto industry to achieve the next phase of growth, it's critical that core infrastructure is in place for institutional adoption; prime brokers bring the necessary credibility and professional trading services expected in legacy finance to digital assets," Ripple stated in a press release.

Prime brokerage firms provide services including leveraged trading execution, custody, lending and borrowing to companies like hedge funds and market makers.

Hidden Road launched in 2018 and offers services to companies in the traditional and digital asset sectors. In 2022, the company completed a Series A financing round with investors including Coinbase Ventures and Citadel Securities.

Hidden Road reportedly cleared transactions worth $3 trillion across 300 institutional customers in 2024.

The acquisition will enable Hidden Road to integrate RLUSD as a collateral asset across its prime brokerage services and use XRPL for post-trade settlement. Ripple stated the deal will be completed in the coming months, pending regulatory approval.

The acquisition comes a few weeks after Ripple and the Securities & Exchange Commission (SEC) reached an agreement to end their more than four-year legal battle.

XRP trades around $1.86 at press time, down 3% on the day.