Ripple’s $5 Billion Offer: Unpacking the Rejection 1. Illiquid Equity Offer: Insider sources reveal that Circle was dissatisfied with the proposed valuation and declined the deal, considering Ripple’s equity offer insufficient. The proposal is reportedly comprised of a mix of cash and private, illiquid Ripple shares, difficult to value in the current market. For a company gearing up for an IPO like Circle, trading its future for uncertain, unquantifiable stock was a risky proposition. Though Ripple hasn’t pursued a fresh bid, they remain interested in a potential deal. 2. Ripple’s Competing Stablecoin: Ripple has already launched its own stablecoin, RLUSD, with plans to operate on both the XRP Ledger and Ethereum. Acquiring Circle would have meant absorbing a direct competitor. The move might have raised concerns about overlap for Circle, who may view it as a counter-play to USDC’s dominance in regulatory space and market trust. 3. Circle’s Strong Pre-IPO Position: Circle is currently well-funded with strong backing from financial giants like BlackRock and Fidelity. Its pre-IPO shares are valued around $40, aiming for a $5 billion IPO valuation. Circle’s previous valuation of $9 Billion in a failed SPAC deal and recent Series F funding rounds of $8B add further credence to its self-assured position. 4. Regulatory and Market Edge: Circle’s USDC is widely accepted by U.S. regulators, integrating seamlessly into platforms like Visa, Stripe, and Robinhood. Crypto analyst Stellar Rippler highlights that Ripple’s acquisition would have granted them instant access to this robust infrastructure, a move Circle was unwilling to relinquish in the pursuit of their own strategy. 5. Strategic Misalignment: Analysts suggest this wasn’t about competition but rather a strategic alignment for consolidation. Ripple aimed to accelerate its presence in the stablecoin sector by acquiring USDC’s network and reputation, however, Circle sought independence and control over its future. In short, Ripple’s ambitious bid foundered on Circle’s strong conviction and pre-IPO market position.