Ripple’s $10B XRP Fire Sale to Acquire Circle? Let’s Unpack That

Rumors are swirling that Ripple might liquidate a jaw-dropping $10 billion in XRP reserves—enough to make even a crypto whale blink. But why? Word on the street points to a potential play for Circle, the stablecoin giant behind USDC.

Here’s the kicker: dumping that much XRP could send shockwaves through the market. We’re talking about nearly 20% of XRP’s total circulating supply hitting the sell button overnight. Meanwhile, Circle’s valuation has been dancing around the $9 billion mark—conveniently close to Ripple’s alleged war chest.

Wall Street would call this ’strategic’—crypto traders might call it madness. Either way, if this deal goes through, it’ll rewrite the rules of crypto M&A. Just don’t ask about the tax implications.

Ripple Labs is allegedly considering buying Circle for billions of dollars. But how will Ripple pay for it without hurting the XRP market? Let’s find out as the experts share their opinions on it. 

Recently, Dave Weisberger made an interesting point about Ripple Labs and the Circle offer. Ripple Labs owns about 40% of XRP, which is a huge stash, and it is considering buying Circle for $10 to $20 billion. 

But if Ripple uses its XRP holdings to help fund that purchase, it WOULD have to sell a huge amount of XRP, about $10 billion worth, from its own treasury. Dave has raised a question: who would buy all that XRP? Besides, dumping so much XRP in the market could hurt its price. 

I love @daveweisberger1 but on this point he is mcgloning so hard right here. Just based on what I personally am getting offered on for my Ripple shares on the secondary market, I don’t think Ripple would even have to sell 1 $XRP to buy Circle. https://t.co/HgL2wRG9Om

However, attorney Fred Rispoli pushed back on Dave’s point. Based on the prices he is getting offered for his Ripple share on the secondary market, he says that Ripple Labs doesn’t need to sell any XRP tokens to buy Circle. Fred said that Ripple probably cannot buy Circle with all cash without selling XRP, but a mix of cash and debt would make the deal work. 

How Ripple Will Fund a $10B Deal?

Dave asks how Ripple would get $10 billion in cash without selling XRP. This might work if Circle accepts mostly stock or XRP at full value, but that’s uncertain. Fred says $10 billion in cash is unlikely and too high. If the price is $7-$9 billion, Ripple could use cash, stock, and debt to fund the deal without selling much XRP. 

Dave also agreed it was a reasonable analysis. If Ripple buys Circle at a fair price, it will not shake things up too much. But if the price is really high, XRP holders might feel some short-term losses.

Circle To Go Public This Week

However, Circle recently said it’s “not for sale” and rejected offers from Ripple and Coinbase. It is now planning a bigger and pricier IPO, targeting a higher valuation of up to $7.2 billion on a fully diluted basis, as per a report from Reuters. 

Circle is all set to go public in New York later this week.