Cryptocurrency ATM firm Bitcoin Depot has agreed to merge with a special-purpose acquisition company (SPAC) which would take it public at an $885 million valuation, the company announced on Thursday, a listing that comes amid a major downturn in the cryptocurrency market and SPAC deals.
In a development first reported by the Wall Street Journal, the crypto ATM firm will merge with the Nasdaq-listed GSR II Meteora Acquisition Corp to form Bitcoin Depot Inc.
The company claims it is the largest Bitcoin ATM network in North America and has more than 7,000 operational kiosks in various retail outlets.
The company says it will raise $170 million in cash as part of the merger and listing process, which it plans to use for growth.
The merger comes at a difficult time for the cryptocurrency market and SPAC mergers both of which are facing major headwinds after a bumper 2021. Since the start of this year, the price of Bitcoin and Ethereum—the two largest cryptocurrencies by market cap—has slumped by more than 54% each. Several high-profile busts in the cryptocurrency market have also prompted more regulatory oversight. Cryptocurrency ATMs have also been banned from operating in the U.K. and even crypto-friendly Singapore. SPACs—publicly listed shell entities that merge with another company to take it public—which were hot ticket items on Wall Street last year have also taken a beating in 2022. According to a CNBC tracker, companies that went public through SPAC mergers have seen their values crash by almost 50% since the start of this year. Amidst the downturn, SPACs are also facing increased regulatory scrutiny, making them less desirable.
Unlike regular cash ATMs which allow users to withdraw and deposit money to their bank accounts, crypto ATMs are designed to allow users to purchase cryptocurrencies like Bitcoin with cash or by using a QR code.
By Siladitya Ray, Forbes Staff