Ripple's bid to take over Circle, the issuer of the widely-used USDC stablecoin, for $4 billion to $5 billion has been declined, according to a Bloomberg report. The offer, which was reported earlier this month, highlights the intensifying race for dominance in the digital asset space.
As Ripple accelerates its expansion, its interest in Circle signals the company's commitment to strengthening its position against larger players. However, Circle's decision to reject the bid reflects its ongoing focus on a public listing and signals confidence in its current valuation and trajectory.
Ripple, the creator of the cryptocurrency XRP, has been making a push into the stablecoin market with the December launch of its own token, RLUSD. To date, RLUSD has achieved a modest market capitalization of $320 million. In contrast, USDC, a joint venture between Circle and Coinbase (NASDAQ:), boasts a significantly larger presence, with its market capitalization exceeding $60 billion.
This disparity in market share highlights the strategic appeal of acquiring Circle for Ripple. A takeover would enable Ripple to rapidly inherit USDC's vast user base and contribute to the token's integration into the DeFi ecosystem.
In addition to issuing XRP and expanding through acquisitions, Ripple recently completed the $1.25 billion purchase of prime brokerage firm Hidden Road. Its attempt to absorb Circle appears to be a calculated step to rapidly boost stablecoin credibility and grab a significant share of the market.
However, Circle itself is not standing still. The company filed for an initial public offering earlier this month and remains focused on pushing it towards completion. Despite speculation, Circle has not shut the door on acquisition talks entirely. Instead, it reportedly viewed Ripple's offer as being too low rather than fundamentally unwelcome.
This leaves the door open for future negotiations, whether with Ripple or another suitor. Additionally, given the evolving regulatory landscape and increasing institutional interest in stablecoins, the valuation of firms like Circle could climb further, strengthening its IPO ambitions.
The timing of Ripple's bid is no coincidence. Crypto markets have seen a recent surge, and merger activity is heating up. Companies like BitGo, Bullish, and Gemini are also eyeing public markets.
Ripple executives have stated that they have no plans to go public, preferring to scale the company through acquisitions. This highlights contrasting strategies among leading crypto firms as they navigate the evolving industry landscape.
