A viral rumor suggesting that Ripple may be preparing a $20 billion takeover bid for Circle, the issuer of the USDC stablecoin, has ignited fresh debate across crypto forums and social media.
But industry analysts are pushing back hard against the speculation, labeling it financially unfeasible and strategically inconsistent with Ripple’s current trajectory.
The buzz originated from crypto-focused social circles on X, where whispers of a potential mega-merger between two of the most influential blockchain companies began to trend.
The supposed figure—$20 billion—drew immediate skepticism, particularly from seasoned analysts who pointed out the gaps between public perception and financial reality.
Industry Expert Dissects the Valuation Myth
Veteran crypto market analyst Dom took to X to dismantle the acquisition theory. According to him, valuing Circle at $20 billion grossly overstates its actual enterprise value, and such a sum would be difficult to justify under any rational investment strategy.
“People confuse assets under management with ownership,” Dom wrote. “The $60B in circulating USDC isn’t Circle’s money—it’s backed by customer deposits. That doesn’t translate into company revenue or valuation.”
Dom pegged a more realistic value for Circle at around $5 billion, citing interest income and operational revenue as the correct metrics to assess its enterprise worth—not the headline-grabbing USDC circulation figure.
Circle’s USDC Isn’t a Revenue Engine—It’s a Liability Buffer
Circle’s USDC, though commanding over $60 billion in circulation, is fully backed by liquid reserves, including short-term U.S. Treasuries and cash. These reserves, held for customer redemptions, are not part of Circle’s balance sheet equity—a crucial distinction often missed in retail investor analysis.
The company earns revenue primarily through the interest accrued on those reserves, which can fluctuate dramatically with shifts in monetary policy.
In a high-rate environment, the yields may seem attractive, but Circle’s profitability remains sensitive to rate cuts and tightening regulation over stablecoin operators.
As one source close to institutional trading desks told CryptoNews.Guru, “Circle is a cash flow business, not a tech unicorn with explosive upside. It’s stable, but not worth $20 billion unless you’re betting on a monopoly, which is unlikely in today’s regulatory landscape.”
Ripple’s RLUSD Launch Undermines the Need for a Buyout
Fueling further doubt about the rumored acquisition is Ripple’s recent foray into the stablecoin space with RLUSD—a U.S. dollar-backed token designed to operate natively on the XRP Ledger.
The move signals Ripple’s commitment to organic development over external buyouts, especially when it comes to core products like payment infrastructure and liquidity protocols.
Analyst Dom underscored this point by noting that Ripple already possesses the technical stack, developer base, and regulatory contacts to launch a competitive stablecoin without inheriting the cost and compliance risks associated with acquiring a firm like Circle.
Regulatory Pressure Casts a Long Shadow Over Circle
Circle’s business model also faces heightened scrutiny from U.S. regulators, particularly the SEC and Treasury Department, which are pushing for increased auditing, disclosures, and stablecoin legislation. This growing regulatory heat only compounds the rationale for a conservative valuation.
Unlike algorithmic or hybrid stablecoins, Circle’s USDC is fully fiat-collateralized, but that hasn’t shielded the company from persistent regulatory uncertainty, particularly in light of its planned U.S. IPO and postponed SPAC deal in 2022.
In that context, Ripple’s past emphasis on legal prudence and structured growth makes a $20 billion Circle acquisition appear even less plausible.
Conclusion
While rumors of a $20 billion Ripple-Circle deal may have stirred excitement in crypto circles, the numbers don’t withstand scrutiny. Expert analysis suggests such a valuation vastly exaggerates Circle’s true enterprise worth—and contradicts Ripple’s pattern of cautious, in-house innovation.
With Ripple pushing its own stablecoin and Circle navigating regulatory headwinds, any talk of a high-premium acquisition looks more like fantasy than future fact.
