The XRP Ledger could see an increase in traffic from a new partner.
Ripple aims to use XRP (XRP 3.28%) do something that crypto rarely succeeds at: making decentralized finance (DeFi) usable – and useful – for financial institutions. And to achieve this goal, on February 4, the company announced that its Ripple Prime platform now supports integration with Hyperliquid (THRESHING 6.52%)a leading crypto exchange for financial derivatives and real-world tokenized assets.
This is the kind of move that could potentially increase the price of XRP for a while. Here’s why.
Image source: Getty Images.
There is an important new bridge between XRP and crypto capital
Putting Ripple’s play with Hyperliquid in the proper context means understanding a few key concepts you may not be familiar with, so let’s quickly review them.
Ripple Prime is, as the name suggests, a premier brokerage platform. For the uninitiated, a prime broker is the back-office layer that allows large investors in financial institutions to trade across multiple markets through a single relationship, with consolidated margin trading, funding and other centralized controls, such as for risk management and regulatory compliance.
Ripple Prime, which uses the XRP Ledger (XRPL) in its backend, is intended to be that layer for digital assets, and this new Hyperliquid connection is its first direct link to a DeFi site.
Hyperliquid, on the other hand, is a relatively new blockchain that functions like a crypto exchange. It manages on-chain order books for financial derivative products such as perpetual futures and offers spot trading. It is very popular among crypto natives due to its sleek interface and easy access to leverage for various crypto assets.
Today’s change
(-3.28%) $-0.05
Current price
$1.39
Key Data Points
Market capitalization
85 billion dollars
Daily scope
$1.39 -$1.45
52 week range
$1.14 -$3.65
Volume
2.4B
Now let’s put the pieces together. If customers can retain margin and risk management within Ripple Prime while accessing on-chain liquidity, and then use these capabilities to invest in Hyperliquid’s derivatives universe, this will significantly reduce operational friction. They are therefore incentivized to use the Ripple platform, which itself uses XRP. And this means that a large amount of XRP will be used over time, which could cause its price to rise.
The benefits are real, but it might take time
If Ripple Prime becomes a popular service for institutions to do business with on-chain derivatives and tokenized assets, Ripple will direct more business to the XRP Ledger. This will be good for the holders.
But Hyperliquid runs its own chain and therefore does not need XRP for any purpose. In other words, don’t mistake the growing activity on Hyperliquid as a surefire green flag for XRP. An institution using Hyperliquid can easily do this without ever using Ripple Prime, although some will likely choose to use it now that it is available.
Today’s change
(-6.52%) $-2.05
Current price
$29.43
Key Data Points
Market capitalization
$7.0 billion
Daily scope
$29.29 -$31.65
52 week range
$9.42 -$59:30
Volume
282M
In the best version for XRP holders, Ripple Prime clients post collateral (often stablecoins), trade on Hyperliquid, and then much of the workload for boring financial plumbing tasks dumps onto the XRP Ledger. The resulting upward pressure on XRP prices could last for years, assuming Ripple Prime and Hyperliquid remain attractive to their target users.
The weaker bullish scenario is that Ripple Prime becomes a niche service rarely used as a workhorse, while the economic center of gravity remains elsewhere, most likely on Hyperliquid itself. In this scenario, XRP further improves its reputation, but due to its limited value capture in scenarios where it does not carry a consistent heavy load, holders likely do not see impressive upside potential.
Overall, I think this integration is pretty good for XRP as it advances Ripple’s targeting of institutional workflows and positions XRP as a tool to achieve this goal.
Still, given the miserable state of the crypto market right now, it is risky to buy XRP even if its fundamentals continue to improve. Only invest in it if you can tolerate serious short-term downsides, and only if you already have a well-diversified crypto portfolio.
