XRP: Ripple Still Eyes Circle Despite IPO Surge

XRP remains a hot topic in the crypto world, especially with recent speculation surrounding Ripple‘s potential acquisition of Circle, even after the latter’s impressive public offering.

Circle’s June 5 debut on the New York Stock Exchange made headlines as its stock ended the day 167% higher, signaling strong investor interest. While this development solidifies Circle’s position in traditional finance, recent research indicates that the possibility of a Ripple-Circle merger is far from off the table.

Circle’s IPO Success Masks Deeper Financial Struggles

Although Circle’s IPO marked a significant achievement, a detailed examination of the company’s financial structure reveals vulnerabilities that could influence future strategic moves. According to Presto Research, approximately 60% of Circle’s revenue is consumed by distribution expenses, deeply impacting its overall profit margins. This cost structure lays bare a financial fragility that isn’t immediately apparent from the stock’s strong performance.

Moreover, Circle’s financial model relies heavily on public equities and is particularly sensitive to interest rate movements. This is unlike platforms such as Coinbase, which benefit from exchange fees and are more insulated from macroeconomic fluctuations. Consequently, Circle’s business approach may carry more risk, especially for investors keen on consistent stablecoin revenue streams.

M&A History and the Ripple Connection

Interestingly, Circle’s own filings suggest a history of M&A interest. In its S-1 filing, Circle disclosed that it had at one point explored mergers or acquisitions involving Coinbase and Ripple. While these discussions didn’t proceed due to disagreements over valuation, Presto Research underscores the potential for the public market to clarify pricing expectations, possibly reopening the door for future negotiations.

This aspect becomes even more relevant as Circle continues to drift towards integration with traditional finance avenues. As large banks and financial institutions consider issuing their own stablecoins, Circle could become a strategic target—not just for Ripple, but also for other fintech giants looking to capitalize on the growing stablecoin market.

Ripple’s Public Stance on Acquisition Talks

At the recent XRP Las Vegas conference, Ripple CEO Brad Garlinghouse directly addressed the mounting speculation about a Ripple-Circle deal. He categorically refuted claims that Ripple had offered between $10 billion to $20 billion for Circle. That said, Garlinghouse didn’t rule out the idea of acquisition entirely, noting that he is “unable to pre-announce” any firm plans.

Circle, for its part, has also denied any current intentions to sell. A spokesperson for the company, choosing to remain anonymous, emphasized that Circle remains focused on its long-term strategic roadmap and is not actively seeking a buyout. These declarations from both sides may serve to temper buzz in the short term, but do little to quell long-term speculation.

Industry Analysts Still Betting on a Deal

Despite official denials, industry observers remain bullish on Circle’s value as an acquisition target. Venture capitalist Chamath Palihapitiya recently stated that acquiring Circle for around $12 to $13 billion would be a strong move, given the company’s infrastructure and future potential in the rapidly expanding stablecoin market.

He pointed to the IPO being 25 times oversubscribed as evidence that Circle’s valuation remains conservative relative to market interest. In his view, companies like Ripple and Coinbase may yet enter into a competitive race for stablecoin dominance—making Circle a prime candidate for acquisition.

Even though there are no confirmed pursuits by Coinbase or Ripple at this moment, ongoing speculation and market dynamics suggest the possibility remains very much alive.

Related: Expert Advice: Sell XRP If You’re Confused

In conclusion, while Circle’s IPO was undeniably successful, its underlying financials and prior M&A interests paint a complex picture—one where Ripple, despite public denials, could still see strategic value in a future acquisition. This keeps XRP enthusiasts and market watchers on alert as the stablecoin race intensifies.