Evernorth Holdings has recently taken significant steps towards going public, having filed its S-4 registration with the SEC on March 18. The company plans to debut on the Nasdaq under the ticker XRPN through a $1 billion merger with Armada Acquisition Corp. II, a special purpose acquisition company (SPAC) already listed on the exchange. This merger is strategically backed by notable players in the cryptocurrency space, including Ripple, SBI Holdings, Pantera Capital, and Kraken.
Evernorth’s entry into the public market comes as it aims to establish itself as a treasury company centered around XRP. Currently, it holds 473 million XRP and plans to utilize a variety of strategies to enhance its asset base. These include lending, decentralized finance (DeFi) ventures, and yield-generating activities on the blockchain.
The company’s significant XRP holdings represent a portion of the growing institutional interest in the cryptocurrency. Combined with the roughly 772 million XRP already held within U.S. spot exchange-traded funds (ETFs), institutional investors now collectively hold about 1.25 billion XRP, accounting for around 2% of the circulating supply of 61.2 billion XRP.
Evernorth is reportedly merging with Armada Acquisition Corp. II in order to function as a publicly traded treasury for XRP, which has implications for the asset’s market dynamics. The merger aims to secure over $1 billion in gross proceeds, positioning Evernorth as the largest company focused on a single cryptocurrency, other than Bitcoin.
The company acquired its XRP holdings through various means. It invested $214.1 million to purchase 84.4 million XRP from the open market at approximately $2.54 each. Additionally, Ripple contributed 126.8 million XRP, while Arrington Capital, which is also the SPAC sponsor, contributed 211.3 million XRP through a separate funding initiative. Currently, with XRP trading around $1.45, the total value of Evernorth’s position is approximately $680 million, significantly below its acquisition cost.
Asheesh Birla, a former senior executive at Ripple, heads Evernorth as CEO. The support from Ripple, alongside prominent financial entities like SBI Holdings and Pantera Capital, suggests a robust foundation for the company. Notably, the S-4 filing follows a pivotal moment on March 17 when the SEC and CFTC jointly classified XRP as a digital commodity—an important determination for a company so heavily invested in a single asset.
Currently, U.S. spot XRP ETFs hold around $1 billion in assets, representing 772 million XRP, which are passively managed in relation to the XRP price. Evernorth seeks to distinguish itself by actively expanding its XRP holdings and generating yield, a feat that ETFs generally do not attempt.
According to the S-4 filing, the plan for growth includes lending XRP through institutional channels, contributing liquidity on the XRP Ledger with Ripple’s RLUSD stablecoin, and operating validators to support network functionality. The company also intends to explore options strategies such as covered calls and cash-secured puts to generate income from its treasury.
In a partnership with t54 Labs, Evernorth aims to manage these yield strategies with sophisticated automated systems designed for institutional risk management. The overall goal is to increase the amount of XRP per share for its investors, benefiting them from both the appreciation of XRP’s price and the growth of the treasury.
However, the merger is awaiting SEC clearance, and Armada II shareholders must vote to approve the transaction. They also have the ability to redeem their shares, which could impact the capital Evernorth has available for purchasing additional XRP. The company’s initial investments have already experienced a decline due to current market conditions, resulting in a $233.7 million impairment since the XRP price has dipped.
Furthermore, the yield strategies proposed have not yet been validated at a substantial scale, raising questions about their effectiveness. While Evernorth’s holdings represent only a fraction of the circulating supply, history suggests that sustained buying by corporate treasuries like Evernorth may eventually influence market prices, much as it did for Bitcoin with its successful treasury buildup.
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