Ripple has agreed to purchase Hidden Highway, a crypto prime dealer, in a deal value $1.25 billion. It is among 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 aspect entails enabling Ripple’s stablecoin for use as collateral throughout Hidden Highway’s companies, the true takeaway is the rising 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 akin 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 danger techniques make them well-suited to help institutional buying and selling wants. Nevertheless, in the case of crypto, banks are hesitant to behave as prime brokers as a result of regulatory uncertainty, excessive market volatility, and issues round custody and compliance. The dearth of clear guidelines and the chance of publicity to unregulated property make conventional banks cautious about getting into the crypto prime brokerage house. Goldman Sachs is a basic instance which re-launched its conventional prime brokerage companies in 2020 however has been gradual to broaden into crypto.
As conventional banks have been gradual to have interaction with crypto dangers, crypto-focused prime brokers have stepped in to satisfy rising institutional demand. Hidden Highway, based in 2018 by Marc Asch, provides clearing, prime brokerage, and financing throughout overseas change, 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 likely be used ?!Will XRP be concerned on this deal ?Is quantity on the XRPL going to blow up ?Verify and repost the video guys
— 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 offer instant scale and meet market demand.
Hidden Highway at present clears $3 trillion yearly throughout all markets and serves over 300 main institutional purchasers. With Ripple’s backing, the dealer plans to develop its capability to serve much more purchasers sooner or later.
You might also like: “Demand from Very Giant Establishments” Drives Hidden Highway’s Fastened Revenue Launch in 2025
A Rising Group of Prime Dealer Unicorns
Hidden Highway just 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 rising 2.5 instances 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 purchasers.
Matrixport is one other unicorn within the house, 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 getting into the house. Final yr, 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 finally supply crypto prime brokerage companies after regulatory readability,” Grant informed Monetary Information. “However that’s not occurring within the subsequent two to a few years. It’ll take time. Crypto-native brokers now perceive how far behind the normal gamers are, and so they’re profiting from that.”
In the meantime, established names like Coinbase are additionally specializing in institutional purchasers. In This autumn 2024, the Nasdaq-listed change 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 robust” as extra prime purchasers 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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