Ripple Labs’ Acquisition Offer Rebuffed by Circle
In a significant move within the blockchain payments sector, Ripple Labs has reportedly proposed a substantial acquisition bid for Circle Internet Group, a competitor in the stablecoin market. The offer ranged between $4 billion and $5 billion but was turned down by Circle, citing the bid as undervalued.
Circle’s Response to Ripple’s Acquisition Interest
According to a report from Bloomberg, Ripple continues to show interest in Circle, although it remains uncertain whether a revised proposal will be made. A Circle spokesperson, when approached about the acquisition rumors, stated, “We do not comment on market rumors.” They further clarified that due to a current “quiet period” imposed by the US Securities and Exchange Commission (SEC), they would not be releasing any additional details regarding their financial strategies. Circle’s long-term vision, however, remains unchanged.
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This interest from Ripple follows its recent acquisition of Hidden Road, a multi-asset prime brokerage, for $1.25 billion. This strategic acquisition aims to bolster Ripple’s position in the stablecoin arena, which is increasingly in demand as digital assets gain more traction for their ability to maintain a stable value.
Circle’s Renewed Public Listing Efforts
Circle, the issuer of the USDC stablecoin, has seen fluctuations in its market valuation. Reports from the previous year indicated that Circle’s value had dropped to between $5 billion and $5.25 billion in secondary market trades, a decline from its $9 billion valuation early in 2022. This valuation fall coincided with an unsuccessful attempt to go public through a SPAC merger with Concord Acquisition Corp.
Recently, Circle has filed an S-1 registration statement with the SEC, signaling its readiness for an anticipated initial public offering (IPO). The company seeks to achieve a valuation between $4 billion and $5 billion through this public offering, which is expected to be filed by the end of April. Although the timeline for the IPO remains uncertain, companies generally begin trading shares around four weeks post-filing, although some stay in registration for extended periods.
This marks Circle’s second foray into public markets. Their previous SPAC merger plans in 2021 were thwarted by regulatory complications, as the SEC did not approve the proposed deal, resulting in several extensions.
Potential Impact of Circle’s IPO
If successful, Circle’s IPO could become the largest cryptocurrency-related public offering since Coinbase went public in 2021 via a direct listing. Financial institutions like JPMorgan and Citi played advisory roles during Coinbase’s IPO process.
The political climate is also seemingly advantageous for Circle’s IPO ambitions. Recent legislative progress regarding stablecoins in Congress could positively influence the company’s prospects. The Senate Banking Committee has advanced a bill, with the House of Representatives poised to vote on its version soon.
Moreover, the current administration under President Donald Trump has shown a favorable stance towards cryptocurrency, with expressed intentions to sign stablecoin legislation by August, indicating potential regulatory backing for the sector.
Market Impact and XRP Performance
As of now, Ripple’s associated digital token, XRP, is trading at $2.20, marking a 6% increase over a two-week period.
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