SPACs in the crypto space with a high chance of spiking upward
I’ve been digging deeper into the crypto treasury bubble theme, which I touched on in the recent RTACU and CEPO/CEPT write-ups. I’m not a fan of the whole ‘golden age of grift’ mood that has overtaken a sizeable part of the market. However, riding the crypto treasury wave via SPACs seems like one of the most asymmetric trade opportunities out there. The downside is limited and well-protected. And if the deal hits the right kind of narrative and attracts speculative inflows, the upside optionality is massive.
RTACU and CEPO/CEPT still look like the most compelling bets—backed by politically connected sponsors who clearly know how to play the game. That said, there are a few other SPACs with pretty interesting angles that fit into this same theme and are worth keeping on the radar: CCCM (covered below), PCAPU (here), MBAV (here), TACO (here).
Columbus Circle Capital Corp I (CCCM)
CCCM is a newly minted SPAC, which IPO’d just a month ago. Last week, FT reported that the company is raising $750m to buy Bitcoin, with crypto influencer Anthony Pompliano (a.k.a. Pomp) set to become the CEO. Pomp has 1.7m followers on X, 800k on YouTube, and runs a fairly popular crypto-focused podcast. Seven months ago, Howard Lutnick was on this podcast under the headline, unironically, “Billionaire Says Bitcoin, Tariffs and Donald Trump Will Make You Rich.” Pomp is also a co-founder of AI/crypto fund Morgan Creek Digital Assets.
CCCM has gone up about ~40% since these unconfirmed rumors came out. This alone highlights how deep in the bubble we are. If the FT story checks out, the play here is obvious: combination of crypto treasury playbook with Pomp’s reach should create massive traction for the share price. I mean, if the stock moved that much just on the media report, it’s not hard to imagine a multibagger upside once/if the deal is confirmed. But this ‘option’ is already quite expensive, with downside to trust value already at 30%.
There are no guarantees that the rumors will turn out to be correct. However, FT report seemed quite detailed and included even funding structure and the new company’s name. So, the rumors appear to be based on quite advanced negotiations.
Assuming the situation was leaked by one of the parties involved, the speed of the dealmaking is both impressive and positive (rumors came out just one month after the IPO). The SPAC is backed by the Cohen family, who’ve launched multiple SPACs over the years, including some high-profile ones (e.g. Payoneer). Interestingly, Payoneer turned out to be one of the worst ones. Most others, including PWP, CCN, IMXI, have done pretty well and held up above or near trust value to this day. Another one (Paya) was acquired at trust value a year after the merger. So, this isn’t some kind of a shady sponsor trying to shove through garbage deals that drop 90% right after deSPACing. Notably, the sponsor’s stake in CCCM is 25%, materially above the typical 20% for most other SPACs.
Additional details on CCCM:
- IPO Date: May 16, 2025
- IPO Size: $250m (including $30m taken by the underwriters)
- IPO Price: $10/share
- Warrants: CCCMW (now at $2.72)
- Sponsor’s stake: 25%
- Sector preference: AI, digital infrastructure
- Trust value: ~$10.00
- Current Price: $14.56 (common shares)
Rumour confirmed as true and the share price tanked. Does this put a big question mark on the thesis behind all these SPACs or are there some nuances which explain the share price behaviour here?
I don’t think the thesis is broken, I just think we need to be more selective re the premium we’re paying over NAV. It was already up a bunch. Just my $0.02. But I guess it could have just as easily meme’d & doubled.
The thesis is that basically everything that is a crypto treasury is going 3-5x at least. Here we have a crypto treasury with a bit of extra story around it that is going to be run by a massive crypto influencer and it is trading only 25% or so above trust value, dipping from 50-60% above trust value on the rumour. I haven’t looked in detail at it yet so it’s entirely possible there’s an explanation for why this one has behaved this way and a different one might still 3-5x, anyone have any thoughts as to what that explanation might be?
There are others like DJT that said they were going to buy a bunch of crypto and their stocks didn’t react or moved down too.
Bitcoin treasuries maybe make sense in something like MSTR’s case where they have the ability to keep raising money with share issurance and build some kind of buying engine. But a random company that just raises money and puts in all in Bitcoin doesn’t strike me as anything special. People might be realizing these are a dime a dozen and no reason to give them a valuation above the amount of money they have.
Of course, I agree with this “But a random company that just raises money and puts in all in Bitcoin doesn’t strike me as anything special. People might be realizing these are a dime a dozen and no reason to give them a valuation above the amount of money they have.”
But isn’t the main thesis behind buying these SPACs that the market is irrationally giving random companies which do this absurdly high valuations at the moment?
I agree with k7 – conversion-to-crypto-treasury space seems to be getting saturated quickly and trades are probably getting overcrowded.
Just this Monday, five public companies (including CCCM) announced crypto pivots. Market reactions were mixed: SQNS dipped slightly, GEM:OL went up 3x, PALM:L jumped 50%, ECDA spiked 30% before fading.
The trade isn’t dead, but the spikes aren’t what they used to be. CCCM has been very underwhelming, especially given Pomp’s involvement. Beyond the saturation, another reason might be the disappointing/dilutive nature of CCCM’s equity raise. The newly released investor deck (slide 10) pegs pro-forma NAV at $7.50/share, which is a substantial value destruction (25% of SPAC’s trust value gone). One reason for that is preferred equity, which converts into 50% pro forma ownership, was issued at a big discount to trust value (just 1.07x NAV, so around $8). Transaction fees are substantial as well. So not only did Cohens and Pomp give SPAC investors a raw deal, but it also suggests they couldn’t raise capital on better terms. All that said, CCCM still trades at 1.5x premium to its pro-forma estimated BTC holdings.
It’s clear that price spikes will be much tougher for other crypto SPACs going forward. A more original hook will be needed. I still like RTAC and CEPO/CEPT. Their connection to Trump world might be that ‘original hook’.
Another potential angle is stablecoins. The Genius Act, which established a regulatory framework for stablecoins, passed two weeks ago. CRCL, the issuer of USDC, is up 7x since its IPO just three weeks ago, and it’s not a small company ($54bn market cap).
Trump’s family recently launched their own stablecoin, World Liberty. It debuted last month, with splashy headlines claiming that the Emirati ruling family had agreed to use $2bn worth of World Liberty coins for one of their investments. Stablecoins are a lucrative business, and Trump will clearly want to capitalize on that and might promote it during his presidency. There is a non-zero chance that World Liberty will be taken public via SPAC, and at the same time a decent chance that, the chosen SPAC could be RTAC or CEPO/CEPT.
Just to clarify, the trust value is still $10, right? You said 25% of SPAC’s trust value is gone. The preferred stock is raised by ProCap BTC, LLC now (and they can start buying bitcoin soon already) and the converts will be issued on deal closing by ProCap Financial, Inc. (the future public entity) and we have a window of roughly 6 months until the deal closes to see if bitcoin surges or the stock price spikes for some reason and we want to dilutively merge into these entities or we redeem at $10. Did I understand correctly?
Sounds like a reasonably priced call “option” with 7-8% max downside.
Trust value is still $10. What I meant is that post-combination, NAV will drop and some value gets destroyed right out of the gate. Until then, the trust value floor still offers downside protection.
Thanks for the great response dt. Certainly seems the thesis is a bit more speculative and harder to achieve than it was but it still has attractive elements. Personally I haven’t decided whether to sell but I wonder how much of the share price falls of CEPT, CEPO and RTAC today are due to SSI members selling!
Anthony Pompliano’s ProCap BTC LLC and Columbus Circle Capital Corp I Amend Business Combination Agreement to Provide Columbus Circle Capital Corp I Public Shareholders with Opportunity for Bitcoin Appreciation
https://www.globenewswire.com/news-release/2025/07/28/3122625/0/en/Anthony-Pompliano-s-ProCap-BTC-LLC-and-Columbus-Circle-Capital-Corp-I-Amend-Business-Combination-Agreement-to-Provide-Columbus-Circle-Capital-Corp-I-Public-Shareholders-with-Opport.html
Under the Business Combination Agreement, if at the closing of the proposed Business Combination the value of the Purchased Bitcoin, based on the price of Bitcoin as determined pursuant to the Business Combination Agreement, is greater than the value of the Purchased Bitcoin based on the Signing Price, ProCap BTC unitholders would be entitled to receive additional pro rata shares of common stock of ProCap Financial (the “adjustment shares”) based on the number of units owned by the particular unitholder immediately prior to closing.
These adjustment shares are allocated based on a predetermined formula set forth in the Business Combination Agreement, with 85% of the adjustment shares that may be issued allocated to the preferred equity investors. Prior to the Amendment, the remaining 15% of the adjustment shares that may be issued at the closing were initially allocated to Anthony Pompliano’s investment firm, Inflection Points Inc., DBA Professional Capital Management, as the sole common unitholder of ProCap BTC. Under the Amendment, CCCM and ProCap BTC have elected to reallocate such adjustment shares to the CCCM public shareholders who do not redeem their shares of CCCM in connection with the closing of the proposed transaction.
Per IB, the redemption value of BRR (formerly CCCM) will be $10.05 per share (and the processing fee will be $100 per application).
I am surprised by the final redemption value. Per AlphaRank, the last disclosed NAV is $10.15 and the “current estimated NAV” is $10.20.
What usually account for the leakage from $10.20 to $10.05?
@snowball from the proxy… “For illustrative purposes, based on funds in the Trust Account of approximately $251.2 million as of June 30, 2025, the estimated per share redemption price would have been $10.05 per share.” I believe IBKR is quoting the 10.05 from there. It’s likely that the funds are investing in some interest bearing account or treasuries which would probably bring current NAV up to the ballpark of 10.20.
Any idea how long it will take to receive payment after the redemption election deadline?
I am trying to estimate the IRR of buying slightly discounted SPACs (such as BRR) and redeeming them.
Judging by this Reddit post, the redemption payment is typically made within 1–2 weeks on IBKR.
https://www.reddit.com/r/SPACs/comments/md4d3f/redeeming_spacs_shares_at_nav_timings_fees_and/?utm_source=chatgpt.com
28 Nov was the last day to buy BRR (Columbus Circle) and be eligible for redemption.
There was unusual volatility around 10:20am, with stock price dropping as low as $9.71 and heavy volume. Trading was suspended briefly due to the volatility.
So for anyone who managed to buy at below estimated trust value of $10.20 and requested redemption, what are the main risks he’s facing?
Prolonged payment timeline that reduces IRR? Broker operational failure to process and forward redemption requests properly?
Even if the combination is voted down, he won’t lose money, right?
Glazer Capital, with 7.7% stake, said on 18 Nov that they were going to vote against the combination unless the company and sponsor make “modifications to the proposed business combination or related terms that could make the transaction more attractive and accretive for all stakeholders. ”
The company didn’t make any modifications so I guess Glazer will vote no on 3 Dec’s EGM.
Also wondering what Glazer’s strategy may be. Voting against the deal but simultaneously requesting redemption?
If Glazer doesn’t redeem and the deal still goes through, won’t Glazer be stuck with a deal that they say they don’t find attractive?
I assume that most shareholders who request redemption will vote for the deal, because they want their money back ASAP.
So there’s not much chance that Glazer’s 7.7% can stop the deal, unless a lot of those shareholders of record on 15 Oct are no longer holding economic interests in BRR as of 1 Dec.
Business combination has been approved.
Even with the expected dilution, I assume BRR (at $5.3) is now trading at a large discount to post-combination NAV.
Does management has incentive and ability to reduce/eliminate the discount? by selling some of its BTC holdings and buying back own shares?