Circle Rejects $5 Billion Ripple Offer, Eyes $10 Billion Valuation

Ripple's $5 billion acquisition offer for Circle, the issuer of the USDC stablecoin, has ignited a significant debate within the crypto community, particularly among XRP supporters. Attorney John Deaton, a prominent figure known for his pro-Ripple stance, has shared his insights on the matter. According to Deaton, Circle's decision to reject Ripple's offer is driven by the belief that the company's valuation could surge in the long term, potentially exceeding the $5 billion mark.

Circle, which manages the USDC stablecoin, considered Ripple's offer to be significantly low. Deaton suggests that Circle's rejection indicates a confidence in its market value, especially post-IPO, which could approach or surpass the $9 billion valuation from its 2022 SPAC attempt. The regulatory environment, particularly the SEC's stance, has become more favorable for crypto, which could validate Circle's expectations of a higher deal, potentially around the $10 billion level.

Circle initially filed for its S-1 form with the SEC on April 1, 2025, with plans to debut under the “CRCL” ticker on the NYSE. Leading investment banking firms Citigroup and JP Morgan Chase are among the key underwriters for the firm. Despite failing to meet its $9 billion valuation target from a previous SPAC deal in 2022, expectations for Circle's IPO valuation range between $4 billion and $5 billion, further justifying its decision to decline Ripple's offer.

In 2024, Circle reported yearly profits of $156 million, significantly lower than its $1.67 billion revenue for the same year. This discrepancy is attributed to the firm paying off 60% of its revenues to distributors like Coinbase. Deaton's analysis highlights Circle's strategic decision to hold out for a higher valuation, reflecting its optimism about future growth and market conditions.