The XRP price remains in a consolidation phase despite the latest launch of CME XRP futures and reports that Ripple Labs is still in talks to acquire Circle, the creator of USD Coin (USDC), the second-biggest stablecoin. The Ripple token was trading at $2.37 on Tuesday, a 10% drop from its high earlier in the week.
Why Ripple Labs Buying Circle is a Big Deal
BanklessTimes reported that Ripple Labs and Coinbase were considering acquiring Circle for about $5 billion. Due to its significant role in the crypto industry, Circle may be worth much more than that if the acquisition goes through.
There are three main reasons why Ripple Labs’ acquisition of Circle would be significant. First, Circle would complement Ripple’s stablecoin business strategy, which is currently supported by Ripple USD (RLUSD), now with a market cap of $313 million.
Second, Ripple Labs would likely integrate USDC into the XRP Ledger network, leading to higher transaction volumes and XRP token burns over time.
Finally, USDC would give Ripple the scale it needs to become a major disruptor to the Swift network, which handles over $150 trillion annually. This integration would enhance the On-Demand Liquidity (ODL) service.
Acquiring Circle would mark another major move following the company’s acquisition of Hidden Road, a leading figure in the prime agency industry.
XRP has other bullish catalysts that could increase its price, even if the Circle transaction fails. Firstly, the launch of XRP futures indicates that one or more companies may apply for a futures ETF similar to the ProShares Bitcoin Strategy ETF (BITO).
Secondly, Polymarket shows odds of over 80% for a spot XRP ETF approval, suggesting potential popularity for these funds. For example, the XXRP ETF has accumulated over $106 million in assets in less than two months.
Thirdly, analysts are highly bullish on XRP price, with Standard Chartered predicting it will eventually surge to $6.5.
XRP Price Prediction if Ripple Buys Circle
The weekly chart indicates that the XRP price is strongly bullish, having remained above the 50-week and 100-week Exponential Moving Averages (EMA).
XRP has also surpassed the key support level of $1.9845, marking the highest swing from April 2021 and the upper boundary of the cup-and-handle pattern. It has also moved above the first support of the Andrews Pitchfork tool.
The XRP price has moved into the second phase of the Elliott Wave pattern. This suggests it will soon enter the third phase, typically the most bullish phase. If this happens, the XRP coin will likely jump to the next key resistance level at $5, 115% above the current level.
