A new Nasdaq-listed special purpose acquisition vehicle (Spac) led by Irish businessman Gary Quin is to merge with a bitcoin treasuries company, called ProCap BTC, in a deal that would take the latter public.
Mr Quin had previously set up another Spac – also known as listed cash shells or ‘blank cheque’ companies – in 2021, but that was subsequently put into liquidation two years later, after it failed to secure a tie-up with an operating company amid volatile equity markets at the time.
The businessman floated his latest Spac, called Columbus Circle Capital Corporation, in May after raising $220 million (€189.6 million) in an initial public offering (IPO).
ProCap BTC is led by US investor and podcast host Anthony Pompliano, ProCap raised more than $750 million in its funding round, including $235 million in convertible debt, with equity making up the rest.
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The new firm aims to hold up to $1 billion in bitcoin on its balance sheet and generate revenue, by offering services like lending, trading, and capital markets – all denominated in bitcoin.
Spacs, which became a hot area of Wall Street in 2021 as equity markets were flying high, have re-emerged as a big investment theme this year.
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“From day one we sought to partner with a platform and a leader that could develop a transformative organisation – and we found that in ProCap BTC and Anthony Pompliano,” said Gary Quin, CEO of Columbus Circle.
“Anthony’s track record as an innovative investor, operator, and early advocate in the bitcoin ecosystem speaks for itself. We believe his deep expertise and relentless conviction will help continue to transform an industry undergoing rapid evolution.”
After the tie-up is completed, the new entity will be called ProCap Financial and be headed by Mr Pompliano. The future title Mr Quin will hold within the group is not yet clear.
Mr Quinn was vice-chairman of Credit Suisse’s investment banking division in Europe from 2010 to December 2019, as was involved in IPOs of Hibernia Reit, Irish Residential Properties Reit, Cairn Homes and Glenveagh Properties.
He also served as an adviser to the Government on the sale of its Aer Lingus stake to IAG in 2015 was involved in Credit Suisse’s role as one of the major international banks that co-ordinated Saudi Arabian Oil Company’s (Aramco) $25.6 billion IPO in late 2019.
The ambition of ProCap Financial is to become something of a Wall Street investment house like Goldman Sachs or Cantor Fitzgerald, rebuilt from the ground up in crypto.
“The legacy financial system is being disrupted by bitcoin,” said Mr Pompliano. “ProCap Financial represents our solution to the increasing demand for bitcoin-native financial services among sophisticated investors.”
The more than 50 per cent surge in the value of Bitcoin over the past 12 months has fuelled a wave of companies being set up to become crypto treasury vehicles, raising billions of dollars in the process. This has lead to fears in some quarters of a bubble emerging.
Still, US trading firm Presto’s head of research said in a report last week that while the risks are real, they’re more nuanced than the collapse scenarios seen during crypto’s last boom-and-bust cycle between late 2021 and late 2022.
“The recent surge in public entities adopting crypto asset treasury operations marks the dawn of a new era in financial engineering, comparable to Leveraged Buyouts (LBOs) in the 1980s or Exchange-Traded Funds (ETFs) in the 1990s,” Mr Chung wrote the report. “However, this phenomenon remains poorly understood outside a small segment of the crypto industry, [and is] often oversimplified.”
