What are the potential tax implications for the company and its shareholders from holding or disposing of the $XRP?

Tax considerations

Because the XRP was bought by Sentinum, a wholly‑owned subsidiary, the acquisition is a capital‑cost basis for the holding company. As long as the tokens remain on the balance sheet, the Company will not recognize any taxable event; the cost will be recorded as an intangible asset (or “other‑than‑cash” investment) and will be subject to periodic fair‑value testing under ASC 805 (or the equivalent IFRS standard). If the market price of XRP rises, the unrealised gain is generally not taxable until the Company either sells the tokens or re‑classifies the holding as a “held‑for‑sale” asset. Conversely, a decline in price creates a valuation‑loss that can be booked against earnings but does not generate a tax deduction until the loss is realized on disposal.

For shareholders, the tax impact hinges on the distribution policy. If Hyperscale Data elects to issue a dividend or a stock‑split that includes the XRP holding, the distribution will be treated as ordinary dividend income (taxed at the shareholder’s marginal rate) unless the company structures it as a return of capital—which would be tax‑free up to the shareholder’s basis in the stock. A direct liquidation of the XRP by the Company would trigger a capital‑gain or loss for the corporation; the resulting net income (or loss) flows through to shareholders via the corporate tax return and is reflected in the per‑share earnings (or loss) that each investor reports on their personal tax return. If the Company sells the XRP at a profit, the gain is taxed at the corporate rate (currently 21 % in the U.S.) and, when passed to shareholders as a dividend, will be subject to double‑taxation—first at the corporate level, then again at the individual level.

Trading implications

From a market‑dynamic perspective, the XRP position adds a crypto‑exposure tail to Hyperscale Data’s otherwise hardware‑focused balance sheet, which can increase volatility in the stock price around crypto‑market moves. Technically, XRP has been in a broad up‑trend since early 2024, with the 4‑hour chart holding above the 0.55 % MA and the 20‑day RSI still in the 55‑65 range—signalling modest upside. If the Company holds the tokens through a potential 2025‑2026 rally (prices could test $0.80–$1.00), the unrealised gain would boost equity and may prompt a share‑repurchase or special dividend announcement, creating a short‑term buying opportunity in GPUS. Conversely, a sharp crypto correction (e.g., XRP falling below $0.30) would force the Company to either absorb a loss—potentially reducing EPS and pressuring the stock lower—or consider an early liquidation to preserve capital, which would generate a realised capital loss that could be used to offset other corporate gains for tax‑planning purposes.

Actionable insight

- Hold GPUS if you are comfortable with crypto‑linked upside and can absorb the extra tax‑layer of potential corporate‑level gains; monitor XRP’s price‑trend and the Company’s quarterly filings for any “valuation‑loss” or “gain‑realisation” disclosures.

- Consider a partial exit if XRP’s technical momentum turns bearish (break below the 0.55 % MA on the 4‑hour chart) and the Company signals a disposition, as a corporate‑level loss could depress GPUS’s forward‑looking earnings and trigger a broader sell‑off.

In short, the tax impact is dormant while the XRP is held, but any disposal—whether by the Company or via a shareholder‑level distribution—will crystallise gains or losses that flow through corporate earnings and ultimately affect shareholders’ personal tax returns. Managing exposure to the crypto tail and staying alert to the Company’s tax‑disclosure language will help you align your position with both market and tax‑efficiency objectives.