Cryptocurrency SPACs Are Setting the Standard

Coincheck this week became the 10th cryptocurrency firm to agree to a reverse merger with a special purpose acquisition company (SPAC) since last year, while stablecoin platform Circle and mining companies BitFuFu and Bitdeer hope to go public this year, according to a Bloomberg report.

“You often can’t evaluate the success of these deals until they close, because they’re going to trade at least near their cash-in-trust value ahead of the shareholder vote,” said Kristi Marvin, CEO of research firm SPACInsider, in the Bloomberg report Wednesday (March 23).

“The better way to evaluate their performance is post-closing of the transaction,” she said.

Three crypto firms have bucked the trend of recent dismal SPAC performance: Core Scientific Inc., one of North America’s largest Bitcoin miners, Bakkt Holdings Inc. (up 43% in the past couple of months) and Cipher Mining Inc. (11%).

The De-SPAC Index, a group of 25 companies, including SoFi Technologies and WeWork, started after a blank-check deal, dropped 9%. Core Scientific is the only crypto firm in the index.

Cipher and Bakkt are trading below where they started when they listed after their respective SPAC deals, the report said.

Related: Japanese Crypto Exchange Coincheck Plans $1.3B SPAC

Japanese cryptocurrency exchange Coincheck will go public on the Nasdaq through a SPAC merger worth $1.3 billion. Coincheck expects to complete the merger with Thunder Bridge Capital Partners IV in the second half of the year, receiving $240 million in cash from the deal, according to Bloomberg.

The exchange, owned by Monex, has roughly 1.5 million verified customers, per the report. Following the SPAC merger, Monex will hold onto a majority stake in the new company, owning 82% of the combined organization versus the 94% it owns now.

Coincheck was the victim of one of the largest crypto hacks in history in 2018, when cybercriminals broke into the exchange, stealing about $500 million worth of XEM, the native coin of blockchain project New Economy Movement or NEM, according to the report.