XRP News: Ripple’s $20 Billion Circle Deal Likely a Rumor – Here’s Why
Highlights
- Rumors emerge that Ripple is raising its $5 billion deal to $20 billion to purchase Circle.
- The XRP community is divided over Ripple's potential acquisition of Cirlce for such a whopping amount.
- Experts predict that Ripple won't exceed $6-6.5 billion in its bid for Circle
Crypto giants Ripple and Circle are again in the spotlight, with rumors of a $20 billion deal surfacing after a $5 billion agreement failed to materialize. Experts are divided on whether Ripple will go all out to acquire the stablecoin issuer, with some considering the $20 billion deal too unrealistic.
This article examines the likelihood of Ripple’s $20 billion bid for Circle and its potential impact on the XRP ecosystem.
Will Ripple Buy Circle for $20B?
In the latest development within the XRP community, all eyes are on Ripple’s escalating efforts to acquire Circle, a move that could solidify its position in the stablecoin market. Ripple is said to be pushing forward with a new $20 billion proposal, following the collapse of its $5 billion Circle deal. While Ripple remains tight-lipped about its Circle acquisition plans, expert insights from Scott Melker (The Wolf Of All Streets) suggest CEO Brad Garlinghouse might be considering a substantial bid increase.
Community Questions the Alleged ‘Unrealistic’ Circle Bid
Despite increasing speculations of Ripple’s potential $20 billion Circle purchase, many question the viability of the deal. For instance, industry expert Dom Kwok suggested that the XRP platform’s final offer for Circle will likely fall within the range of $6 billion to $6.5 billion. His estimation is based on the typical acquisition premium, which is the amount a buyer pays above the target company’s valuation to incentivize the sale. This premium usually ranges from 20% to 30%.
Assuming that Circle’s valuation is around $5 billion, the expert asserted that a 20% premium would put the offer at $6 billion, while a 30% premium would put it at $6.5 billion. With this detailed analysis, the expert dismisses the rumors surrounding Ripple’s potential purchase of the USDT issuer for a whopping $20 billion.
In a separate thread, he stated, “Any big account claiming Ripple is going to acquire Circle for $20 billion does not understand the industry.”
Amidst these speculations, XRP lawyer John Deaton has brought up an interesting angle regarding the deal. The XRP attorney underscored the possibility of a “bidding war” between Ripple and Coinbase, a top crypto exchange, which already holds a minority stake in the stablecoin issuer.
However, if Ripple finally acquires Circle, one of the largest stablecoin issuers, it could be a game-changer for the former.
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