Why does Ripple want Circle? What an acquisition would mean

The general consensus seems to be that it's easier to buy out the competition than it is to beat it with a competing product.

I mean, generally speaking, this is true especially when the competition has already done an exceptional job capturing the target market. Even Circle’s USDC hasn't been able to steal away Tether’s USDT users even though it's had so many opportunities to do so and you don't even want to know how much of a gap there is between these two stablecoins and every other option out there.

It's embarrassingly large.

But back to Ripple.

For those who don't know, Ripple Labs, Inc is an American company founded in 2012 and has over the years been marketed as the “solution” to the flawed global banking system when it comes to payments and exchange.

So far, well, its most successful business model has been manipulating the XRP token market for profit. Of course I have no real data beyond speculations from observation to back up what I just said but neither does Ripple have any real data 13 years later to prove me wrong.

Also, it's pretty much public knowledge that Ripple makes money selling XRP and it can't end there because how do you maintain a $128.88 billion market capitalization without market manipulation since you lack real product adoption?

Who even uses Ripple’s tech?

Over the years we've each come across countless reports of partnerships with this and that, at some point I've personally questioned if all the media were just paid to talk about XRP and Ripple because there wasn't really much else happening beyond the countless “price predictions for XRP” and exaggerated partnerships reports on these media platforms.

I guess the small investor community often called the “XRP Armies — which includes lots of loud and active bots by the way” are degenerates that will click every XRP bull post?

Attention capturing is the business of the media after all.

The XRP Ledger is the supposed decentralized blockchain developed and maintained by Ripple for the purpose of solving the flaws of traditional banking systems and it's XRP token is the 4th most valuable cryptocurrency by market capitalization yet, there's hardly any real data on its usage and value flow as available for other blockchains.

Most XRPL explorers are trash and the data often displayed are not easy to analyze. You can't really measure what goes on for the chain but the invested capital for marketing and partnerships sure makes for a good standing that XRP remains a crypto asset with high speculations despite evidently being shit that anybody can tell just by looking at Coingecko.

Ripple’s bid for Circle: it's a brand bid

Blockchain payments firm Ripple has reportedly bid up to $5 billion in an effort to acquire stablecoin issuer Circle, but the offer was rejected.

According to an April 30 Bloomberg report, Ripple put in a bid of $4 billion to $5 billion as part of an attempted takeover of Circle, which was rejected as being too low.

The reported acquisition attempt came less than 30 days after Circle applied for an initial public offering (IPO) in the US. — Cointelegraph report

Since this report, there's been more reports flying across X that the bid has been increased to $20 billion but this has neither been confirmed nor refuted by Ripple so far.

It's important to note that the last estimated valuation of Ripple is $11 billion but according to the report linked above, CEO Brad Garlinghouse called this valuation data “outdated” as of January.

XRP sales and price manipulation must be really profitable.

Moving on.

It's been recently revealed that Circle isn't very profitable when compared to Tether and most of the company’s revenue goes to Coinbase.

Ripple has to be aware of this so this leads to a conclusion that this acquisition isn't profit-driven in the short-term but about acquiring what the brand has established for itself over the years. Certainly, if this buyout happens, Ripple is likely to keep USDC functioning as it is today, as opposed to merging(essentially forcefully converting USDC to RLUSD).

Now one can't tell if Ripple would still keep USDC under Circle and proceed with going public since Ripple itself has refuted reports of the firm going public.

This is a strategic bid to keep XRP a top crypto asset and push Ripple up the ladder of payments. USDC already has great penetration as a digital USD so an acquisition of Circle would simply make it easier for Ripple to establish dominance within the market segment it marketed itself for and failed at capturing effectively.

RLUSD evidently never stood a chance because XRP is trash. But since USDC is natively ETH, and already heavily utilized across its DeFi ecosystem, that's leverage that Ripple can work with.

The business of stablecoins is growing intensively. It would be no surprise if bids went out for Tether at some point too. What's clear is that this is the leading narrative at this time and it's clearly the modern system of this digital age to replace traditional banking.

Lots of eyes are going to be targeting successful products within this market.

Posted Using INLEO