Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

What Could SPACs Learn from Crypto?

CryptocurrencyApr 13, 2021 05:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
What Could SPACs Learn from Crypto?

  • Bill Gates commented that most of SPACs are going public too early
  • Special Purpose Acquisition Companies (SPACs) allow attracting investors without the IPO process
  • For now, most of SPACs seem unreliable, but they are permitted to disclose forecasts to potential investors. That’s why they are more attractive for potential investors
  • Cryptos were in a similar situation before they advanced transparency models and gained public trust

Despite quite a long lifespan, cryptocurrencies still remain a subject of concern for some people. Due to their decentralized nature and distributed ledger technology, mass opinions vary. But what do they stand against? The stock markets.

At the beginning of April, the Microsoft Corporation (NASDAQ:MSFT) founder, Bill Gates, commented on the recent boom of SPACs. During his interview with CNBC journalists, he claimed that we flipped from the world where companies stayed private too long to the opposite situation, when some companies may be going public too soon.

Also, he mentioned that there would be both high-quality and low-quality SPAC companies with this approach. So the investors should decide themselves “what is what” and “which is which.” Of course, this will bring more confusion to beginners in this field.

What is a SPAC?

SPACs or Special Purpose Acquisition Companies are a new wave in the market. They offer private businesses a fast track to go in public, circumventing the IPO process. This literally means investors can get into the company almost right after it launches. Opinions on this new approach differ from positive to negative.

On the one hand, critics claim that investors are getting into companies and getting burnt immediately without the IPO process. They have very little time to figure out if it’s a legitimate company. Most of that companies even don’t have the end-product, but they already opened stock trades.

For instance, Nikola, a company providing zero-emission vehicles, experienced a temporary loss after Hindenburg Research accused the company of fraud due to inaccurate allegations in the report.

On the Flipside

  • People protect SPACs because they are able to reveal the qualitative picture to potential investors

Not all of the specialists and analytics are sceptical about SPACs. Chamath Palihapitiya, a former Facebook Inc (NASDAQ:FB). executive, expressed optimistic predictions for them. In short, they use a regulatory loophole that allows them to disclose forecasts to potential investors. This explains why more and more people are taking them on board and investing in.

What About Crypto?

Cryptocurrencies have come a long way from the unknown to the asset invested by Elon Musk himself. For Bitcoin, it took less than ten years to break mass unacceptance and prove its reliability. However, it was a pioneer of blockchain technology.

The newest debutants in the market make a breakthrough easier and faster. This happens due to crypto popularisation as well as the improvement of the crypto bull market. Consider the latest Cardano’s price rise that occurred several months ago.

There were several reasons for that. In general, Cardano’s successful moves were compiled in a winning gambit. Improving their protocol transparency model and its Coinbase pro listing spurred a bullish process. Moreover, with this move, the coin jumped in the NFT hype train as well.

The things to Learn for SPACs

The value of a coin is based on the scale of community involvement, which includes user demand, scarcity or asset’s utility, etc. The main idea is the more people believe in it and invest in, the more price rise.

In the beginning, cryptos were in a similar position as SPACs are now: quite ambitious ideas with the lack of public trust. On the other side, constant advancements and the improving process led them to high competence and confident investments.

Bill Gates may be right: SPACs are a rough idea in the current form. However, the more people are interested in enhancement, the more transparency, and clear vision will be implemented.

This rule relates to businesses in general: the real value is over empty promises.

We flipped from the world where companies stayed private too long to the opposite, when some companies may be going public too soon. Bill Gates

Continue reading on DailyCoin

What Could SPACs Learn from Crypto?

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email