Circle Considers $5 Billion Sale of Coinbase or Ripple Instead of IPO!

Although Circle filed for an IPO last month (IPO), the company behind the USDC stablecoin also appears to be considering an alternative route: a possible sale to Coinbase or Ripple.

IPO or acquisition? Circle keeps both options open

Circle has not yet abandoned its intention to go public, but no concrete steps have been taken, such as a roadshow or details on the terms.

Behind the scenes, however, the company is also said to be actively discussing a possible acquisition with both Coinbase and Ripple. This seems to be a two-pronged approach for Circle: it is exploring both a listing on the stock exchange and a strategic sale.

Coinbase as the most logical buyer

According to insiders, Coinbase is currently the most likely candidate to acquire Circle. The two companies have a long history together: in 2018, they jointly founded the Center Consortium to launch USDC. Although the consortium was dissolved in 2023, Coinbase still owns an equity stake in Circle and has influence over key decisions.

That influence runs deep: Coinbase has a say in scenarios like insolvency and must approve large deals involving USDC, according to sources. With a strong balance sheet — including $8 billion in cash reserves — and deep integration with Circle’s USDC operations, Coinbase is strategically and financially well-positioned for an acquisition.

A full acquisition would also further bolster the revenue Coinbase already generates from USDC, making the deal attractive in the long term.

Ripple offered $4 to $5 billion, but was rejected

Ripple is another big player in the acquisition story. The company, which has billions of XRP tokens in escrow, is reportedly Fortune have made a bid in the range of $4 to $5 billion.

That bid was rejected by Circle, which is aiming for a higher valuation of at least $5 billion. Still, Ripple remains a serious option, especially if circumstances change or Circle wants to restart negotiations.

Circle must choose: stock market or sale

Circle’s final decision will depend on several factors, including market conditions, investor interest, and the merits of an IPO versus an acquisition. While the recent public success of platforms like eToro has given rise to confidence in an IPO, the synergies with Coinbase could prove decisive.

Questions & Answers

What is Circle considering right now: an IPO or a sale?
Both. Circle has filed for an IPO, but is also in advanced talks about a potential acquisition by Coinbase or Ripple.

Why is Coinbase the most likely buyer?
Coinbase is strategically best positioned to acquire Circle due to its existing ties, ownership interests, influence over USDC decisions, and strong financial position.

What was Ripple's offer and why was it rejected?
Ripple reportedly made a bid of $4 to $5 billion, but Circle rejected it as it sought a higher valuation.