Crypto space deals are now in jeopardy as planned mergers face deadline extensions and terminations.
A number of planned mergers between crypto and web3 firms with special purpose acquisition firms (spacs) are being delayed or canceled as a result of the recent market rout.
Reading: Bitcoin griid spac q1
Spacs, also known as blank check firms, are publicly traded shell companies created for the sole purpose of taking private companies public. Although spacs have a reputation as an underground way of going public, they came to prominence during the pandemic-driven market boom. in 2021, space deals peaked at 81 deals totaling $155.43 billion.
They became particularly attractive to crypto companies, whose unique business models could pose challenges in gaining listing approval through traditional IPO routes, such as an IPO. In all, 14 companies, including metaverse infrastructure firm infiniteworld, crypto mining firms corescietific, cipher mining and bakkt, and usdc usdc-backer circle, have signed merger deals with spacs since 2019.
However, only five of the 14 deals announced since then came to fruition when the market for slots collapsed with the market reversal.
this week there were more consequences.
Stock and stockbroker
etoro announced the termination of its agreement with fintech v, a space that would have taken the company public for $10 billion. the parties failed to meet the June 30 deadline stipulated in the initial agreement, citing “circumstances beyond the control of either party” as the reason for the termination. etoro maintains that its “balance sheet is strong,” according to the termination announcement.
forbes is also among the companies that announced planned space deals that terminated the agreement. The media company had previously announced its intention to go public in a deal with the acquisition of Magnum Opus, a Hong Kong-based SPAC, but the companies mutually announced they would terminate the deal in June this year.
Other spacs have sought extensions to give them more time to complete the transaction, or perhaps renegotiate certain terms like valuation. One company worth paying close attention to is Circle, the main issuer of the USDC stablecoin, a dollar-based token with a market capitalization of $55.57 billion. usdc rose to prominence following the collapse of ust ust /luna luna and made gains in tether, the largest stablecoin by market capitalization as a result of its being perceived as more transparent and trustworthy.
The company announced a merger with Concord Acquisition Corp with the intention of going public in July of last year. The companies then signed an extension in February that doubled Circle’s valuation from $4.5 billion to $9 billion.
“Regarding the agreement that was originally announced in July 2021 and updated in February 2022, we are continuing the process of reviewing our S4 registration statement with the SEC,” a spokesperson for the Circle told Forbes. the companies presented an extension of the agreement until December 10, 2022.
bullish global, the peter thiel-backed crypto exchange that made headlines last year as being valued at $9bn, is among those that have extended rescission deadlines with their respective venues, laying off around 10% of his staff earlier this week. . The Cayman Islands-based company announced a planned merger with the acquisition of Far Peak in July 2021. Although the initial listing was scheduled for July 8, Bullish and Far Peak have extended their external termination date to December 31. of 2022.
Other exchanges that also have completion dates for planned mergers with SPACS include Japanese crypto exchange Coincheck and New York-based digital asset trading platform Apifiny Group.
Several crypto mining companies were also considering going public through spacs. bitfufu and grid infrastructure are among those that announced spac mergers last year and have extended their completion deadlines.
In addition, Bitdeer, a cryptocurrency cloud mining company backed by Bitmain, the largest cryptocurrency mining rig manufacturing company, and the acquisition of Blue Safari have extended their termination deadline to September 14, 2019. 2022.
“While we cannot comment on the details of our transaction, what we can share is that we are confident in our business model and our listing plan is in the works. We look forward to sharing more updates as possible,” a Bitdeer spokesperson told Forbes.
bitmain is also the parent company of bitfufu, another crypto mining company that expects to go public in a deal with arisz acquisition corporation in the third quarter of this year.
Finally, grid infrastructure, a bitcoin carbon-free mining company, was initially expected to close its merger with adit edtech acquisition corp in the first quarter of this year, but the company has yet to go public. Nor did Adit Edtech’s network infrastructure respond to Forbes’ request for comment.
bitcoin btc miners could find the space environment this year particularly challenging, with most publicly traded stocks down 55%-80% on the year. Furthermore, their finances are under pressure as many have been forced to take on large amounts of debt to finance expansions. with the bitcoin price reversal, they are forced to liquidate bitcoin holdings at the end of this cycle. In May, publicly traded miners sold every bitcoin they produced for the first time in history.
Listed crypto mining companies have slumped in the last year.
However, market uncertainty does not appear to be affecting the prices of the spacs involved in the deals, as shares of publicly traded spacs have been relatively flat, fluctuating between 1-3% since beginning of the year.
share prices of spac companies remained relatively stable over the past year, despite the merger agreement… [+] extensions and terminations
*this article has been updated to reflect that primeblock has not extended its termination deadline with 10x acquisition capital venture corp.