Key Points
- Bitcoin reward firm Fold Inc is nearing a SPAC merger that could raise its value to $500 million.
- The move is part of a larger trend of crypto companies going public, reflecting mainstream acceptance of digital currencies.
Bitcoin reward company, Fold Inc, is on the brink of completing a deal that could see it go public via a merger with a special purpose acquisition company (SPAC). This merger could potentially increase Fold’s value to approximately $500 million.
The deal is being conducted in conjunction with FTAC Emerald Acquisition Corp, led by Betsy Cohen. While an official announcement is expected this week, the specifics of the deal remain confidential.
Background of Fold Inc
Established in 2014, Fold Inc offers features that enable users to earn Bitcoin rewards through purchases made using their debit cards, a concept similar to cash-back programs on traditional credit cards. The company has successfully garnered the interest of individuals intrigued by this reward system, amassing approximately 574,000 user accounts.
This merger is part of a larger trend of cryptocurrency firms turning towards public offerings, a move that follows the recovery of the crypto market from a recent slump. Other leading companies planning to go public include Bitcoin mining firm Genesis Digital Assets and Northern Data AG, a provider of artificial intelligence computing services.
Implications of the Merger
The merger involving Fold Inc suggests an increasing interest from traditional businesses in the crypto industry, signaling the growing adoption of digital currency. It also highlights the ongoing demand for integrating cryptocurrency into daily transactions.
The merger is a result of the growth in crypto startup funding, with the valuation of crypto startups reaching $2.4 billion in Q1 2024. This can be attributed to lower interest rates and the introduction of the first US Bitcoin spot exchange-traded funds (ETFs).
The approval of Bitcoin and Ethereum ETFs by the US Securities Exchange Commission has enhanced the acceptance of cryptocurrencies as assets. This could potentially integrate digital currency into the mainstream financial ecosystem. However, the SPAC market has previously slowed, with many deals failing or stocks plummeting post-merger.
Challenges with SPAC Deals
SPAC reached its peak in 2021 but has significantly declined since then, with many deals either not materializing or leading to a substantial decrease in stock prices after the merger. In 2021, SPAC mergers in the US rose to roughly $128 billion, but this figure fell to a mere $9.5 billion in announced deals the following year.
Despite the challenges SPAC has faced in the past, a potential merger for Fold Inc could mark a significant milestone for the crypto industry. It would indicate that cryptocurrencies are gaining more acceptance, and the path to more transparent regulation is nearing.
As more information about the deal is revealed, the crypto community will be keen to see how it could influence the crypto sector and potentially encourage other large institutions and countries to adopt cryptocurrency.
