Ripple continues to throw its own in-house cryptocurrency around like it has an unlimited supply — which isn’t too far from the truth.
Pocket Change
The fintech startup — known for its a real-time gross settlement system, currency exchange, and remittance network — has invested $25 million of its own digital currency (XRP) into “a dedicated sidecar vehicle alongside Blockchain Capital’s fourth venture fund,” as reported by Fortune.
Ripple’s investment follows last month’s announcement that Blockchain Capital — the longest-standing blockchain-focused venture capital firm — had already “raised $150 million to invest in equity and cryptocurrency assets.”
The XRP investment, however, marks one of the first times a major venture firm has accepted cryptocurrency as capital. Ripple’s in-house tokens were placed into the specifically-created cryptocurrency-only vehicle called Blockchain Capital Parallel IV. A spokesperson told Fortune:
We created the parallel fund to separate our other LPs from the risk of any change in valuation associated with accepting Ripple’s investment in XRP.
Blockchain Capital is already a major investor in Ripple and is now looking to strategically pour its new stockpile of XRP tokens into healthcare and identity management companies. Blockchain Capital managing partner Bart Stephens told Fortune:
Whether it’s using XRP, bitcoin, or just the underlying blockchain technology, our goal is to find the best projects and give them the resources to be successful companies that deliver value to customers for the long-term.
XRP has a total supply of 99,992,405,149, with 39,094,520,623 of that currently in circulation. The vast majority of XRP is still owned by the company, and Ripple fully intends to invest more of its seemingly limitless supply of cryptocurrency into other funds. Patrick Griffin, Ripple’s SVP of Strategic Growth, explained:
This is the first fund that we’ve contributed to, and it won’t be the last.
Accepting cryptocurrency as investment capital is not without its risks.
As noted by Fortune, storage startup Omni raised $25 million in Series B funding — the majority of which came in the form of XRP — in December. The very same day, the value of XRP plummeted nearly 50 percent, leaving the startup with some seriously heavy bags.
What do you think about Ripple’s $25 million XRP investment with Blockchain Capital? Let us know in the comments below!
Images courtesy of Adobe Stock, Blockchain Capital, and Bitcoinist archives.