IPO dark horse or acquisition target? Circle is reportedly seeking a $5 billion sale, with Coinbase and Ripple interested in taking over

As the stablecoin market competition heats up, USDC issuer Circle is simultaneously pursuing two routes: "On one hand, submitting an IPO application, and on the other, keeping the door open for potential acquisitions". According to Fortune, the company is seeking a sale of at least $5 billion, with potential buyers including Coinbase and Ripple.

Dual-Track Approach: Circle Simultaneously Pursuing IPO and Acquisition Negotiations

The report indicates that Circle submitted an initial public offering (IPO) prospectus to the U.S. Securities and Exchange Commission (SEC) in April. However, simultaneously, the company has also signaled openness to potential acquirers. Ripple previously proposed acquiring Circle for between $40 to $50 billion, but was politely declined due to the price being too low.

(Circle Promotes USDC with High Yields alongside Binance and Coinbase, Ripple's $5 Billion Acquisition Attempt Rejected)

Notably, this is not the first time Circle has considered capital market options. As early as 2021, the company announced plans to go public through a SPAC merger, but this was abandoned by the end of 2022 due to the crypto winter. It wasn't until January of last year that they revived their efforts, with an estimated valuation of up to $9 billion at the time.

Moody's attributed this rating downgrade to the continuously expanding U.S. fiscal deficit and rising debt interest liabilities. In fact, among the three major credit rating agencies in the United States, two have previously made similar decisions; S&P Global Ratings lowered the rating in 2011, and Fitch Ratings also downgraded it in 2023.

The second market trigger was Trump's Big, Beautiful Tax Bill, which is being questioned by both the House and Senate. The bill is considered to potentially increase the federal deficit and is currently under revision to gain bipartisan support. The following is an analysis and report.

Analysts Believe Moody's Rating Downgrade Will Only Cause Short-Term Market Volatility

Market observation analysts believe Moody's rating adjustment should be viewed rationally. Nicholas Colas, co-founder of DataTrek Research, pointed out that Moody's rating downgrade might trigger short-term market volatility, but historical experience shows this does not equate to structural interest rate increases, imminent economic recession, or long-term stock market decline.

He added that credit rating agencies play an important role in capital markets, but their evaluation of U.S. sovereign debt cannot accurately predict the price trends of digital assets.

The White House seems unconcerned about this news. Treasury Secretary Scott Bessent stated in an NBC interview this morning that Moody's is a lagging indicator.

Big, Beautiful Tax Bill May Increase Federal Deficit, Bill Undergoing Revision Review

The "Big, Beautiful Tax Bill" pushed by the Trump administration received partial key committee votes in the House on Sunday. The bill is unanimously considered by bipartisan experts to further increase the federal deficit over the next decade. House Speaker Mike Johnson stated that to gain support from fiscal conservatives within the Republican Party, the bill's content has been partially revised. House Budget Committee Chairman Jodey Arrington revealed that the bill's content is still under ongoing consultation, with the House expected to vote as early as Thursday.

Moody's, as one of the three major international credit rating agencies, has long been considered an important reference for global investors to measure risk through its sovereign credit ratings. Founded in 1909, Moody's rating system brought standardized risk measurement tools to the debt market, especially after the rapid development of international financial markets, where its assessment of national sovereign credit has been viewed as a key variable for international capital flow and borrowing costs.

The United States has long maintained the highest AAA credit rating, symbolizing global capital market confidence. However, since S&P first downgraded the U.S. rating in 2011, the U.S. credit rating has begun to waver. Moody's follow-up this time symbolizes an increased market concern about the U.S. federal government's deficit and policy uncertainties. Although the short-term impact on assets and market prices is limited, in the long term, continued rating downgrades may persistently increase government borrowing costs and challenge the U.S. status as a "global risk-free asset".