Ripple has agreed to purchase Hidden Highway, a crypto prime dealer, in a deal value $1.25 billion. It is likely one of the largest acquisitions within the crypto sector—behind solely Kraken’s $1.5 billion buy of NinjaTrader and barely forward of Stripe’s $1.1 billion deal for Bridge. A separate $1.2 billion deal, involving Galaxy Digital’s curiosity in BitGo, was mentioned however by no means finalised.
The Ripple-Hidden Highway settlement highlights two key factors: the rising dominance of crypto prime brokers and the rising position of stablecoins.
Whereas the stablecoin facet includes enabling Ripple’s stablecoin for use as collateral throughout Hidden Highway’s companies, the actual takeaway is the growing significance of prime brokers.
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Establishments Drive Demand for Prime Brokers
Prime brokers play a key position in monetary markets, together with the rising crypto sector, by providing a full vary of companies corresponding to buying and selling, custody, and lending to main establishments like hedge funds, banks, and personal fairness companies.
Banks are main gamers within the prime brokerage business. Their international attain, entry to capital, and robust threat programs make them well-suited to help institutional buying and selling wants. Nonetheless, in relation to crypto, banks are hesitant to behave as prime brokers resulting from regulatory uncertainty, excessive market volatility, and considerations round custody and compliance. The dearth of clear guidelines and the danger of publicity to unregulated property make conventional banks cautious about coming into the crypto prime brokerage area. Goldman Sachs is a traditional instance which re-launched its conventional prime brokerage companies in 2020 however has been gradual to develop into crypto.
As conventional banks have been gradual to have interaction with crypto dangers, crypto-focused prime brokers have stepped in to fulfill rising institutional demand. Hidden Highway, based in 2018 by Marc Asch, affords clearing, prime brokerage, and financing throughout overseas alternate, digital property, derivatives, swaps, and fixed-income markets.
🚨 Right here is the complete speech of @MonicaLongSF about @Ripple buying Hidden Highway for $1.25B👇How RLUSD will probably be used ?!Will XRP be concerned on this deal ?Is quantity on the XRPL going to blow up ?Test and repost the video guys 👇 pic.twitter.com/knOQ1WP7aM
— Arthur (@XrpArthur) April 8, 2025
As a result of these companies want giant quantities of capital, Ripple has agreed to inject billions into Hidden Highway to supply instant scale and meet market demand.
Hidden Highway presently clears $3 trillion yearly throughout all markets and serves over 300 main institutional shoppers. With Ripple’s backing, the dealer plans to develop its capability to serve much more shoppers sooner or later.
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A Rising Group of Prime Dealer Unicorns
Hidden Highway isn’t the one billion-dollar crypto prime dealer. FalconX, backed by GIC, leads the pack with an $8 billion valuation. It posted report progress in Q2 2024, with income growing 2.5 occasions in comparison with the identical interval in 2023. In line with its web site, FalconX had accomplished over $1.5 trillion in buying and selling quantity by the top of 2023 and serves greater than 600 institutional shoppers.
Matrixport is one other unicorn within the area, valued at over $1 billion. Final September, it acquired the asset administration arm of Crypto Finance, which is owned by Deutsche Börse Group.
New companies are additionally coming into the area. Final 12 months, Tim Grant—former CEO of SIX Digital—launched a crypto prime brokerage and now leads the $1 billion funding agency Deus X Capital as its CEO.
“Conventional banks will ultimately provide crypto prime brokerage companies after regulatory readability,” Grant instructed Monetary Information. “However that’s not occurring within the subsequent two to 3 years. It’ll take time. Crypto-native brokers now perceive how far behind the standard gamers are, and so they’re profiting from that.”
In the meantime, established names like Coinbase are additionally specializing in institutional shoppers. In This autumn 2024, the Nasdaq-listed alternate earned $141 million in institutional transaction income, a 156 per cent rise from the earlier quarter.
In its shareholder letter, Coinbase added that its “onboarding pipeline stays sturdy” as extra prime shoppers undertake its Prime companies throughout custody, buying and selling, financing, and staking.
This text was written by Arnab Shome at www.financemagnates.com.
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