$35 Billion Crypto SPAC Deals Remain ‘Incomplete’

Lavina Daryanani
Source: Financial Times

Since the beginning of the year, U.S. stocks have been progressive rise. The market did witness a couple of hiccups, but no major corrections took place. The “sell in May and go away” phenomenon, for instance, did not essentially impact the Nasdaq. This index appreciated by nearly 7% during the same period. Contrarily, the S&P 500 did feel a pinch. However, it managed to cap its losses and mostly traded horizontally during the said period. On the YTD frame, the former is 32%, while the latter has inclined by 16%.

Nevertheless, when compared to its mid-October low registered last year, the S&P 500 has risen by more than 20%, [24.6% precisely], successfully checking the technical definition of a bull market.

Nasdaq Composite, S&P 500 Indices by TradingView

Also Read: Spot Bitcoin ETF Approval by SEC ‘Fairly High’: Bernstein

Crypto’s ‘Wall Street’ Quest

Well, even though the stock market has been faring well under bullish conditions, there is not essentially a lot of interest in making crypto companies public, through Special Purpose Acquisition Company [SPAC] deals.

Owing to multiple collapses, the past year-and-a-half was quite brutal for the crypto industry. The catastrophe managed to single-handedly erode investors’ trust and replace it with fear and skepticism. As a result, several companies have now taken a step back. Data from SPACInsider pointed out, that nine digital asset companies that intended to go public dropped their plans amid crypto winter. Prominent names like stablecoin issuer Circle, crypto exchange Bullish Global, and brokerage eToro were among the entities. Forbes pointed out,

With deals valuing the companies from $160 million to more than $10 billion, over $35 billion worth of announced crypto SPAC transactions have failed to be completed since March 2021.

In fact, out of 26 announced crypto-related SPACs since 2021, only one, i.e. the Bitdeer deal, materialized. As of now, five transactions worth $6.7 billion are open. Notably, three among them are crypto miners.

Also Read: SEC Sues Coinbase, Citing U.S. Securities Law Violations

Never Say ‘Never’

At the moment, Coinbase is the only publicly listed crypto exchange in the U.S. The company is under scrutiny by the SEC for alleged securities laws violations. A lawyer, who specialized in SPACs reportedly told Forbes,

“The Coinbase problem becomes a concern for other companies.”

However, everything is not at state of grim. GSR II Meteora Acquisition Group’s acquisition of Bitcoin ATM operator Depot was one of the latest SPAC deals to be green-flagged by shareholders. This is the second such case of 2023. Bitcoin Depot’s started trading on Nasdaq on July 3. As of the latest close, its shares were priced at $3.29.

Several companies at this stage, including blockchain payments firm Ripple, are examining the possibility of going public. Thus, with the industry trying to get back on its feet, the state of affairs can be expected to gradually improve.

Also Read: Crypto: San Francisco Firm Sees 80% Jump in Custody Assets