XRP Market Faces Anxiety Over Potential Ripple Acquisition of Circle
CoinRoutes CEO Dave Weisberger raised concerns about Ripple Labs potentially financing a takeover of Circle for $10 to $20 billion. He questioned how Ripple could sell approximately $10 billion in XRP without significantly impacting the market, suggesting a sudden supply increase could harm prices.
Market Reactions
- Pro-XRP attorney Fred Rispoli disputed Weisberger's claims, arguing Ripple could acquire Circle with a mix of cash and debt rather than needing to sell XRP.
- Rispoli estimated Ripple's valuation at around $15 billion, indicating that an acquisition cost of $7–9 billion might be feasible without selling XRP.
- Weisberger acknowledged Rispoli's analysis but warned it could lead to short-term price declines for XRP holders.
Ripple's January 2024 buyback valued the company at $11.3 billion, with over $1 billion in cash and $25 billion in digital assets, primarily XRP. The firm controls about 52 billion XRP, though 36 billion are escrowed.
Acquisition Feasibility
- Circle has stated it is "not for sale," despite earlier negotiations with Ripple reportedly valuing the company below $5 billion.
- Ripple launched its dollar-token RLUSD in January, which aims to complement XRP, boosting its strategic position.
- Even with favorable conditions, Ripple may still need to liquidate several hundred million dollars' worth of XRP to cover acquisition costs.
As of now, XRP trades at $2.19.
