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- Ripple’s $5B offer for Circle was turned down as inadequate because Circle wants to go for its IPO.
- Circle’s USDC leads the market, while Ripple’s RLUSD remains a smaller player in stablecoins.
- Crypto firms explore IPOs as the market rebounds, driving fierce competition in the digital asset space.
Ripple recently announced that it will acquire Circle Internet Group Inc., the issuer of the USDC stablecoin, for between $4 to $5 billion. Nevertheless, Circle did not consider the proposal feasible for accepting as its value was too low, as reported by Bloomberg. They have been in discussion for several months, but Ripple has yet to decide whether it will place a new, higher bid.
Earlier this month, Circle revealed that it had filed its IPO. The firm intends to join the NYSE under the symbol “CRCL” and seeks to raise between $4 billion and $5 billion in the offering. However, the net income and EBITDA of Circle were below expectations, which was closely tied to the increased operational costs and reduced growth rates for 2024, with $1.68 billion in revenues.
Ripple’s IPO Amid Market Recovery
Ripple’s offer comes after other firms started seeking IPOs after crypto tokens recovered, with more firms seeking initial public offerings. Other firms like BitGo, Gemini, and Bullish Global have also revealed that they may soon go for an IPO.
Ripple has not stood still in the stablecoin market after it declared that it is to launch RLUSD in December. Currently, the RLUSD has a lower market capitalization of $316.9 million compared to that of the USDC, having an estimated market value of $61.7 billion.
The proposed deal to acquire Circle is regarded as a part of a long-term development plan aimed at strengthening Ripple’s position in the sphere of stablecoins. The two companies are not equal in terms of the geographical market coverage. USDC has a more extensive market coverage than RLUSD, since RLUSD is relatively new in the market. However, Circle might still have been inclined towards finalizing its IPO, which is why it did not enter discussions for acquisition at this phase.
Circle’s Silence on Deal
The representative of Circle was reluctant to discuss the acquisition offer directly. Because of the regulations on quiet periods, the spokesperson could not give details. They did add, however, that the long-term vision of the company was not altered in any way. Like the others, Ripple also declined to contribute its opinions on the debates.
Currently, there is high activity in the crypto market. More companies are turning their sights on IPOs as tokenization grows. The action of Ripple on buying Circle underlines that the competition is increasing within the market. With numerous market players remaining active in order to take a significant position in the market for stablecoins. Whether Ripple will make another bid or change its approach on other concerns is yet to be seen.
