A New Wave of Crypto SPAC Deals
After the frenzy of 2021 and the subsequent “crypto winter,” special purpose acquisition company (SPAC) activity in the digital asset space is back with renewed vigor in 2025. The broader SPAC market has raised over $10 billion through 56 offerings so far this year, matching the amount raised in all of 2024. Notably, crypto‑linked SPACs, especially those structured as “Bitcoin treasury” vehicles, are driving much of this resurgence.
Some notable recent deals include:
- Cantor Equity Partners announced a merger with Twenty One Capital, creating a bitcoin‑treasury firm majority‑owned by Tether and Bitfinex, raising hundreds of millions in equity and convertible notes.
- ProCap BTC is merging with Columbus Circle Capital (formerly Columbia Circle), raising a total of $750M to pursue a public bitcoin‑holding strategy.
These deals mark a shift from earlier SPACs targeting operating crypto companies (exchanges, wallets, miners) toward public companies whose core business is holding Bitcoin or Ethereum reserves.
What’s Fueling This Surge?
Crypto‑Treasury Model & ETF Momentum
The boom in Bitcoin and Ethereum ETFs in 2024‑2025 poured billions into crypto-backed investment vehicles, setting the stage for SPACs offering equity exposure tied to large crypto holdings.
Investors, particularly institutional ones, now view these treasury SPACs as proxy plays on crypto while avoiding direct volatility exposure.
Favorable Regulatory Shift
Under the new SEC leadership of Chairman Paul Atkins, the agency launched “Project Crypto” in July 2025—a significant doctrinal shift designed to promote blockchain integration, tokenization, and clearer asset classifications. Moreover, the SEC recently clarified that Bitcoin and Ether may be treated as cash equivalents, potentially exempting treasury SPACs from the Investment Company Act of 1940, opening regulatory room for crypto treasury strategies.
Macro & Political Tailwinds
A more risk‑friendly capital environment, combined with pro‑crypto signals from the Trump administration, including executive emphases on digital asset leadership and lighter regulation, have reinforced SPAC momentum in crypto‑adjacent sectors.
Regulatory Framework for Crypto‑Related SPACs
SPAC Governance & SEC Rules
On January 24, 2024, the SEC adopted new rules increasing disclosure requirements for SPAC IPOs and de-SPAC mergers, bringing them closer in transparency to traditional IPOs, including mandatory disclosure of sponsor fees, dilution impact, use of projections and conflicts of interest.
Crypto Industry Oversight
Separately, the SEC continues enforcing Howey‑test-based securities laws in crypto, pursuing cases against exchanges like Binance and Coinbase, and litigating high-profile token issuers like Ripple and Terra, though clarifications and court rulings (e.g. XRP retail sales) have somewhat limited enforcement scope. “Project Crypto” now aims to reshape this framework, providing clearer definitions between tokens classified as securities, commodities or cash equivalents, and easing fundraising, especially for token issuance and staking apps.
Industry Pushback & Watchdogs
Advocacy groups such as Better Markets warn that SPAC + crypto deals are inherently risky, often lacking transparency, loaded with sponsor fees and potentially reminiscent of the poorly performing SPACs of 2020‑2021. Within the SEC, there is pressure from political groups (notably, from the newly-formed Department of Government Efficiency) to ease SPAC regulation, sparking concerns about regulatory independence.
Benefits of Crypto SPAC Activity
- Fast Access to Public Capital: SPAC mergers avoid lengthy roadshows and can provide immediate liquidity, allowing crypto firms or treasury-holding vehicles to scale quickly.
- Upfront Valuations and Narrative Control: By negotiating enterprise value in advance and customizing disclosures, crypto teams can control their story more effectively than in volatile IPO processes.
- Liquidity for Investors & VCs: Early venture‑backers and founders in crypto companies can redeem shares or generate liquidity via structured SPAC stock offerings, while maintaining some control if differential-voting stock is used.
- Bridging Crypto and Traditional Finance: These SPACs create publicly tradable proxies for crypto exposure, blending regulated equity markets with digital asset strategy.
Risks and Downsides
Valuation Volatility & Underperformance
Historically, roughly eighty-five percent of SPACs post-merger trade below IPO price, with many dropping under $1/share over time. Crypto‑treasury SPACs remain speculative high‑beta vehicles and may follow similar trajectories.
Structural & Disclosure Weaknesses
Sponsor fees can consume up to 20% of capital raised, while investors often lack detail on dilution and contingency rights. Despite new SEC rules, disclosure quality varies between sponsors.
Technical Due Diligence Challenges
Crypto assets introduce unique risks: custody protocol questions, on‑chain asset verification, AML/KYC compliance, code audits, and smart‑contract vulnerabilities. Inexperienced investors may not fully grasp these complexities.
Regulatory & Political Uncertainty
Though regulations are evolving favorably, enforcement remains uneven, especially for token classifications and custodial operations. Political interference in SEC independence, as noted, creates uncertainty about long‑term policy anchors.
Bubble & Overheating Risks
Analysts caution that crypto‑treasury SPAC models could mirror speculative excesses of 2021 SPAC mania. Overexuberance may lead to inflated valuations unsupported by real operating performance.
Conclusion
In 2025, SPACs are once again front and center as a route for crypto-related companies, or even pure treasury plays, to enter the public markets. The revival is powered by ETF momentum, regulatory shifts under “Project Crypto,” and macro‑political support. While this model offers rapid liquidity, valuation flexibility, and access to institutional capital, it also carries substantial risks: volatility, structural dilution, opaque disclosures, technical complexity and regulatory uncertainty.
Successful execution will depend on disciplined due diligence, especially on chain‑based asset audits, robust disclosures compliant with revamped SEC rules, and thoughtful risk structuring. For well‑capitalized crypto firms or treasury plays with institutional legitimacy, SPACs may represent an expressive bridge between emerging digital finance and structured equity markets. But as always, investor caution and regulatory clarity remain critical.
