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Market, SPAC Volatility Create Cruel Summer for Crypto M&A

It may or may not be amicable, but the long-planned crypto merger and SPAC acquisition has fallen apart over the past month.

Since July, five deals have collapsed involving cryptocurrency companies planning to go public through the back door via a merger with a special purpose acquisition company (SPAC).

This is not surprising given the dire state of the crypto market, with most cryptocurrencies pushing the price of Bitcoin off a cliff. is falling.

Things took a turn for the worse in July as Bitcoin fell below the psychologically important $20,000 mark, surprising investors.

Q2 scraps deals

Beyond that, publicly traded companies deteriorated dramatically in the second quarter, with the share price of the highest-profile cryptocurrency company, Coinbase Global (which avoided a SPAC merger to list directly on the Nasdaq). It crashed, dropping 64% in the second quarter.In the quarter alone, trading activity dipped, posting a loss of $1.1 billion.

Also Read: Despite $1.1 Billion Loss, Coinbase Performs Well, Stocks Fall 10%

Most notably, investor Mike Novogratz’s crypto investment firm, Galaxy Digital, filed a lawsuit on Tuesday (August 16), demanding a $100 million split fee. Then there was the decidedly unfriendly end to the acquisition of cryptocurrency custodian BitGo. .

Also See: Galaxy Digital Cancels $1.2 Billion BitGo Acquisition

On August 15, Novogratz told the Financial Times that Canada-listed Galaxy Digital had planned to list on the Nasdaq despite posting a loss of $554 million in the second quarter. Said it was postponed. Q1 – partly due to losses from his $48 billion collapse of the Terra/LUNA stablecoin ecosystem. This is something he stood by so strongly that he got a large tattoo of his LUNA token on his shoulder.

Read more: How the $48 Billion Collapse of Stablecoins Ripple Across Cryptocurrencies

That was the same day Novogratz announced that Galaxy Digital was ending the merger, citing BitGo’s failure to submit audited financial results in a timely manner.

BitGo responded indignantly, adding that its lawyers called the attempt to accuse BitGo “ridiculous” and had filed audited financial statements. “It’s no secret that Galaxy reported his $550 million loss last quarter, that the stock has performed poorly, and that both Galaxy and Novogratz are distracted by the Luna debacle. “

walk away

Not all mergers fell apart. Venture capital firm Dragonfly announced today that it has acquired Metastable, the oldest cryptocurrency hedge fund managing over $400 million. On a small scale, Messari, a cryptocurrency market intelligence firm, acquired the assets and business of Dove Metrics, a cryptocurrency funding data and intelligence firm, on August 2nd.

But unsurprisingly, the acquisition of a SPAC to put the company public has collapsed in all sectors of the crypto industry as its financial results plummet.

On Friday (August 12), crypto mining firm Prime Blockchain and SPAC 10X Capital Venture Acquisition closed a $1.2 billion merger agreement by mutual consent. A month earlier, on July 20, his cryptocurrency miner VCV Digital Technology and Fortune Rise Acquisition also announced their withdrawal.

READ MORE: Crypto Mining Company Prime Blockchain Cancels $1.2 Billion SPAC

Also on Friday, Voltus, an energy management software company that specializes in connecting cryptocurrency miners and electricity markets, parted ways with Broadscale Acquisition Corp. SPAC in a $1.3 billion merger.

Cryptocurrency trading platform eToro and FinTech Acquisition Corp. V SPAC completed their merger on July 5.

eToro — a “social investing” crypto company that incentivizes successful traders to gain followers who invest according to their portfolio — “proven track record of growth and strong momentum…trading has become unfeasible,” says Chairman Betsy Cohen said. FinTech Acquisition Corp.’s V.

Then, on July 25, institutional market-focused crypto trading firm Apifiny closed a $530 million merger with Abri SPAC 1.

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