Pundit Explains Why XRP Escrow is Not Included in Ripple’s $40B Valuation

Ripple's $40 billion valuation just hit the headlines—but that eye-popping number doesn't include its massive XRP escrow. One expert breaks down the accounting maneuver that keeps billions off the books.

The Escrow Exclusion

Think of Ripple's escrowed XRP like a vault of gold bars it owns but can't currently spend. Standard valuation models focus on liquid assets and revenue streams, not locked-up reserves. That vault holds tens of billions of dollars worth of XRP, yet for valuation purposes, it's often treated as a separate entity—a future potential rather than present-day capital.

Market Mechanics & Perception

This separation creates a fascinating dynamic. The market prices Ripple based on its technology, partnerships, and current XRP sales, deliberately sidestepping the sheer volume held in escrow. It's a classic case of optics over on-paper wealth—a move that would make any Wall Street banker nod in approval while quietly adjusting their own balance sheet.

Why This Accounting Dance Matters

Omitting the escrow protects Ripple from volatility-based valuation swings and shapes public perception. It tells a story of a focused tech company, not a giant crypto hoarder. The strategy is clear: highlight enterprise growth, not speculative asset holdings.

The result? A cleaner, arguably more conservative valuation that appeals to institutional partners—and one less headache for accountants who'd rather not explain a $40 billion number that could halve on a tweet. Sometimes, the smartest finance move is knowing what *not* to count.

Pundits have begun speculating why the recent Ripple funding round that pushed its valuation to $40 billion does not include the firm's XRP escrow holdings. Ripple's $40B Valuation For context, early last month, Ripple announced a $500 million secondary market share sale, valuing the company at $40 billion.

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