SPAC-Driven Listings in the Crypto Sector: Assessing Valuation Risks and Growth Potential in Stablecoin Issuers Post-Merger

The resurgence of SPACs in the crypto sector has reignited debates about their role as a vehicle for stablecoin issuers to access public markets. While these mergers offer speed and narrative control, they also expose investors to a unique blend of risks and opportunities. This analysis examines the valuation dynamics and growth trajectories of stablecoin firms post-SPAC merger, drawing on recent case studies, regulatory shifts, and market trends.

The SPAC Revival and Its Crypto-Specific Challenges

The crypto SPAC market has seen a revival in 2025, with over $10 billion raised year-to-date-matching the total from 2024-driven by Bitcoin treasury structures and favorable regulatory signals. However, historical data reveals a sobering reality: approximately 85% of SPACs trade below their IPO price post-merger, with many dropping below $1/share. This trend underscores the high-beta nature of crypto SPACs, which face structural risks such as sponsor fees (often 20% of capital), valuation volatility, and disclosure weaknesses according to market analysis.

For stablecoin issuers, these risks are compounded by the inherent fragility of their asset models. First Digital Group, a Hong Kong-based stablecoin firm, exemplifies this tension. Despite planning a SPAC merger with CSLM Digital Asset Acquisition Corp III, its FDUSD stablecoin has seen circulation plummet from $4.4 billion to $920 million-a decline linked to broader crypto market volatility and regulatory uncertainty as reported in industry analysis. This case highlights the challenge of maintaining user trust and liquidity in a sector where depegging events (e.g., USDC's 2023 dip below $0.87) can erode value rapidly according to stablecoin risk assessments.

Growth Potential: Capital, Narrative, and Regulatory Tailwinds

Despite these risks, SPACs offer stablecoin firms a unique pathway to scale. The ability to raise capital quickly-often through institutional backing-enables firms to expand reserves, enhance governance, and pursue strategic partnerships. For instance, Circle's June 2025 IPO surged from $6.9 billion to $63.9 billion within two weeks, demonstrating the market's appetite for stablecoin innovation. This success was bolstered by the bipartisan GENIUS Act, which mandated reserve transparency and monthly disclosures, addressing prior concerns about asset quality.

Regulatory clarity has also spurred M&A activity. The same act has encouraged institutional adoption, as seen in Stripe's $1.1 billion acquisition of Bridge to expand stablecoin-enabled payment solutions according to industry reports. Meanwhile, Bitcoin treasury SPACs-entities holding crypto reserves-have attracted investors seeking exposure to digital assets without direct volatility risk as highlighted in market analysis. These structures, however, remain speculative, with valuations often driven by macroeconomic trends such as Bitcoin's price swing from $126,000 to $86,000 in 2025.

Case Studies: Divergent Outcomes in the Post-Merger Landscape

The performance of crypto SPACs post-merger has diverged sharply. Firms with "Classic DAT" strategies (e.g., MicroStrategy) and "Miners" (cash-flow Bitcoin generators) have delivered strong risk-adjusted returns during bull markets according to research findings. In contrast, "The Imitators"-micro-cap companies pivoting to token strategies-have underperformed, with a -86.9% total return and a Sharpe ratio of -0.423, reflecting narrative-driven overvaluation according to academic analysis.

First Digital's SPAC merger plans highlight the sector's duality. While the firm aims to leverage public market access for growth, its declining FDUSD circulation signals operational fragility. Conversely, Circle's IPO success illustrates how robust governance and regulatory alignment can unlock value. By securing a $63.9 billion valuation, Circle capitalized on investor confidence in its reserve-backed model and strategic positioning in the fintech ecosystem as reported in financial analysis.

Regulatory and Structural Risks: A Double-Edged Sword

The regulatory environment remains a critical variable. While the GENIUS Act has enhanced transparency, it has not eliminated systemic risks such as depegging or unstable lending structures according to risk assessments. S&P Global's stablecoin stability framework further emphasizes the need for rigorous credit and custody risk assessments as detailed in their assessment. For SPAC-listed firms, these requirements add operational complexity, particularly for entities with thin balance sheets or opaque governance.

Moreover, SPACs face legal and structural headwinds. Lawsuits from 2020–2021 deals continue to emerge, underscoring the importance of due diligence. Sponsor fees and redemption risks also pose challenges, as seen in the struggles of SPACs backed by figures like Brandon Lutnick and Anthony Pompliano, whose shares trade far below peaks according to market analysis.

Conclusion: Balancing Speed and Caution

SPACs offer stablecoin issuers a powerful tool to accelerate growth and control narratives, but they come with significant risks. The sector's post-merger performance hinges on three factors: regulatory alignment, reserve transparency, and macroeconomic conditions. While success stories like Circle demonstrate the potential for explosive growth, the broader trend of 85% of SPACs underperforming their IPO prices serves as a cautionary note.

Investors must weigh these dynamics carefully. For stablecoin firms, the path to sustainable growth lies not just in accessing capital but in building resilient, transparent models that withstand market shocks. As the crypto SPAC landscape evolves, the line between innovation and speculation will continue to blur-demanding rigorous analysis and a long-term perspective.