Circle Explores Sale to Coinbase or Ripple
Circle Weighs Sale Amidst IPO Plans
Circle Internet Financial, the company behind USDC, the second-largest stablecoin, is reportedly exploring a potential sale to either Coinbase or Ripple. This news, broken by Fortune Crypto, comes as Circle is also pursuing an initial public offering (IPO).
Key Developments:
- Informal takeover discussions are underway with Coinbase and Ripple.
- A previous $4-5 billion offer from Ripple was rejected by Circle as undervalued.
- Circle is reportedly seeking a valuation of at least $5 billion.
Sources suggest that Circle's preference might lean towards Coinbase, given their established operational and commercial ties, including shared USDC revenue and governance. This close relationship could streamline the acquisition process and ensure a smoother integration.
The rejected Ripple offer, which included a significant portion of XRP tokens, likely faced challenges due to the inherent volatility of cryptocurrency payments. Circle, focusing on a traditional IPO, might find such payments less attractive compared to a cash deal. The effective value of Ripple’s offer might have fallen below Circle's minimum valuation threshold, even if nominally within the $4-5 billion range.
Coinbase's recent $2.9 billion acquisition of Deribit highlights its active M&A strategy and its CEO, Brian Armstrong, has publicly expressed openness to further acquisitions, although remaining tight-lipped about a potential Circle deal.
While Circle remains committed to its IPO, initially filed in April with the SEC, macroeconomic uncertainty may cause delays. This echoes challenges faced by other companies with stalled IPOs due to the current economic climate.
Implications for the Crypto Industry
The outcome of these discussions will significantly impact the cryptocurrency landscape. A sale to either Coinbase or Ripple would consolidate market share and potentially alter the competitive dynamics within the stablecoin and broader crypto markets. The ultimate decision by Circle will depend on various factors, including valuation, strategic alignment, and the overall market conditions.
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