Why Circle Could Become the Most Strategic Acquisition in Coinbase’s History

Circle, the issuer of USDC, may be weighing a $5 billion exit, Fortune reports, citing unnamed sources close to the negotiations. Among those circling: Coinbase and Ripple. Officially, Circle claims it’s “not for sale,” staying the course toward an IPO.

But the alignment feels too exact to dismiss. The IPO timeline. The looming shadow of regulators. The giants of crypto watching closely. Together, they turn rumor into narrative momentum.

It was a post from Artemis co-founder John Ma that cracked open the conversation. And it’s been spreading ever since.

John Ma’s latest thread outlines how a potential Circle acquisition could double Coinbase’s market capitalization. More importantly, he frames it as a foundational step toward shaping the future of stablecoin infrastructure in the U.S. Here are three powerful insights we uncovered after diving into his analysis.

Circle Acquisition May Unlock $2B in Earnings, $60B in Value for Coinbase

John Ma outlines a precise investment rationale: acquiring Circle could be transformational for Coinbase, even if the company no longer holds direct control over USDC. His forecast hinges on two fundamentals — a stablecoin sector poised for major growth, and Circle’s high-margin revenue stream built around interest on reserve holdings.

Even at 3% fed rate, $250B USDC could generate $7.5B in revenue… $2B net income… $60B in market cap.

The projection rests on one big but realistic bet: if the stablecoin market climbs to $1–2 trillion in the next 3–5 years, and USDC holds onto at least 25%, the token’s supply could reach $250–500 billion. Even with rates cooling to 3%, Circle would still earn revenue on reserve holdings. At a margin of 25–30%, that means more than $2 billion in net income.

Coinbase, as the full owner, would tap into the entire stream of profits — no longer bound by a revenue-sharing agreement. With a $66 billion valuation today, adding $2 billion in profit and applying a 30x multiple could send Coinbase’s market cap soaring — possibly doubling it.

Control Over Profit — Why Strategic Buyers Look Beyond the Bottom Line

Luca Prosperi, CEO of M^0 Labs, sees the Circle acquisition in a different light. For him, Coinbase has already monetized much of USDC’s value. What matters now is eliminating ambiguity. The deal is about locking in control and protecting core infrastructure from future competition.

Coinbase already captures most of Circle's reserve income. Buying Circle is about control… Keep USDC going, and fire 70% of the staff.

In 2024 alone, Coinbase earned nearly $900 million through its partnership with Circle for USDC distribution — a clear sign of deep integration. But if Circle is acquired by Ripple or another third-party exchange, Coinbase doesn’t just lose earnings. It could lose control of its most critical fiat on-ramp.

Amid pending legislation like the GENIUS Act, which could impose stricter capital and reserve rules, the strategic priority shifts. In this environment, consolidation offers a safer path than open competition.

Check this out: Coinbase’s Top Policy Exec Breaks Down What the GENIUS Act Really Means

Quarterly profits are secondary for a buyer like Coinbase. What truly matters is predictability — of contracts, equity structures, and USDC’s product development. Acquiring Circle acts as a hedge against deeper, often invisible risks that could undermine Coinbase’s infrastructure from within.

Regulation and New Players Are Accelerating the Race for Stablecoin Market Dominance

Scroll through John Ma’s replies, and the pattern is obvious: new players are coming fast. Ripple. Banks. Fintech startups. Everyone wants a piece of the digital dollar. In that world, Circle isn’t just a future bet — it’s Coinbase’s shield. But only if they act soon.

By 2025, Ripple had already rolled out RLUSD and partnered with Kraken. Now, traditional banks are stepping in, developing their own stablecoins tailored for institutions — with transparent reserves, full licensing, and regulator trust baked in. That’s an existential challenge for Circle. And a timely reason for Coinbase to act — before the window closes.

Add to that the pending GENIUS legislation, which could enforce tighter rules around reserves and capital. That would constrain Circle’s independence. Meanwhile, Coinbase, fresh off its entry into the S&P 500, is looking for a compliant, strategic asset to anchor its infrastructure. Circle may be the answer — if they move quickly.

Circle’s future hinges on who takes control. Alone, it may erode. Acquired by a rival, it becomes Coinbase’s liability. But brought in-house, it forms the U.S.’s only regulated “exchange + stablecoin issuer” duo — a powerful position heading into the next wave of crypto evolution.