SPACs are coming back, and they’re rushing to capitalize on market excitement surrounding crypto, even as many past crypto-related SPAC mergers have flopped.
A flurry of blank check companies has announced mergers with newly formed cryptocurrency treasury companies, whose business is primarily buying and growing digital asset holdings like Bitcoin and Ether. While past crypto-focused SPACs mainly sought Bitcoin miners and trading platforms, these deals offer an alternative way to play the space.
The Bitcoin treasury model was pioneered by MicroStrategy (MSTR), now known as Strategy, with public investors this year essentially assigning $2 of equity value for every $1 of underlying crypto. Other companies followed suit, with large crypto investments announced by GameStop (GME), Trump Media (DJT), and several others.
While traditional IPO investors may be reluctant to bet on a newly formed Bitcoin holding company, the SPAC market appears to be more receptive. SPAC mergers can also take less time than traditional IPOs, allowing companies and sponsors to quickly take advantage of emerging trends.
Since April, six SPACs have announced deals with cryptocurrency treasuries...
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