Ripple Tries To Buy Circle For $5 Billion — Rejected!

The battlefield has finally materialized: welcome to the true stablecoin war. On one side, Ripple, armed with billions and ready to buy out. On the other, Circle, an established giant, determined to remain master of its destiny. The latest salvo? A colossal offer from Ripple, which wanted to take over Circle and its iconic USDC. But this time, the target dodged, opting to aim for Wall Street rather than a hostile acquisition.

A 5 Billion Offer on the Table… Refused

Behind the scenes, the information had been circulating for several weeks. Ripple attempted a big move: to buy Circle for an estimated amount between 4 and 5 billion dollars. The goal was clear: to accelerate its presence in the stablecoin sector and overshadow its own RLUSD, still embryonic with its 316 million dollars in capitalization.

But Circle said no.

According to Bloomberg, the offer was deemed too low. A cold shower for Ripple. And a symbolic snub, as Circle had just filed its IPO application. The issue is not only financial, it is also strategic. Because Circle, with its 62 billion dollars of USDC in circulation, plays in the giants’ league.

On Ripple’s side, issuer of the XRP cryptocurrency, they are digesting this. “We have plenty of liquidity, so we remain in acquisition mode“, had warned Monica Long, Ripple’s president. And the numbers back her up: the company just announced the acquisition of Hidden Road for 1.25 billion dollars.

Rumors are buzzing: Ripple might come back for another try. But Circle, for now, prefers to follow its own plan. “We do not comment on market rumors“, a spokesperson simply responded.

The Shadow of Wall Street and Investor Pressure

Behind this acquisition attempt, the entire stablecoin ecosystem resonates. Circle is not an ordinary company. It is about to become the first publicly traded stablecoin issuer. The entry ticket? A valuation between 4 and 6 billion dollars according to Matthew Sigel, with valuation multiples worthy of the tech industry: up to 38 times earnings.

But the company is not free from criticism. In 2024, its revenues grew by 16%, but its EBITDA dropped by 29%. This is due, among other things, to rising operational costs and expensive partnerships – notably with Coinbase and Binance.

“Circle experienced temporary losses but maintains a solid base with continued revenue growth“, Sigel specifies on X.

Yet, in this environment of slowed growth, Ripple sensed an opportunity. Because if the IPO is delayed or fails, a door might open again.

Meanwhile, the overall stablecoin market reaches 241 billion dollars. Tether remains the undisputed leader, but USDC is firmly established in second place. RLUSD, meanwhile, struggles to emerge. And that is the whole issue: for Ripple, acquiring Circle was to take a strategic shortcut. The shortcut to dominance.

Behind the Deals, Radically Opposed Visions

This confrontation between Ripple and Circle mainly reveals two visions of the sector. Ripple proceeds without any intention of going public. “We have enough cash. The IPO is not a priority“, confirmed Brad Garlinghouse, Ripple’s CEO, as early as October 2024.

Circle, on the other hand, plays the card of transparency and regulation. Despite uncertainties, despite a “crypto storm” shaking valuations, it continues to believe in the potential of a public issuer. A risky bet, but one that could set a precedent.

And the differences don’t stop there. Ripple favors massive acquisitions and a vertical strategy. Circle, on its side, wants to expand its services while retaining control. In the background, American regulators, long hostile, now seem more open. Enough to revive ambitions… and rivalries.

By rejecting Ripple’s offer, Circle didn’t just refuse a check. It sent a message : USDC will not change hands so easily. But the war is far from over. Other offers could come. Other giants could enter the arena. And above all, the market is waiting. Because this battle is not only fought on numbers, but on trust.

Despite market turmoil, Circle continues to aim for an IPO. The IPO, initially planned for early April, has been postponed. While awaiting calmer days, all eyes turn to the next phase of the battle.