Crypto and IPO lull revive Spac market as Wall Street warms up to risk again

After years of retreat, special purpose acquisition companies—or Spacs—are staging a comeback, buoyed by Wall Street’s appetite for risk and the continued freeze in traditional initial public offerings. At the 2025 Spac Conference held in upscale Rye, New York, the mood was notably more upbeat than in 2022, when a surprise appearance by Stormy Daniels couldn’t mask the market’s decline, the Financial Times reported.

This year, the conference drew top-tier law firms, private investors, and Wall Street bankers, signalling that blank-cheque firms are once again finding favour as an alternative route to public markets. With 56 new Spac offerings raising over $10 billion already this year—matching 2024’s total—organizers say the industry is experiencing a cautious resurgence.

From a “poor man’s IPO” to crypto conduit

Long dismissed as a second-tier option for taking companies public, Spacs briefly rose to prominence in the early days of the pandemic. The 2021 peak saw 600 deals raise a staggering $163 billion. But a crackdown from the Biden-era Securities and Exchange Commission and a wave of post-merger disappointments pushed investors away.

Now, under a Trump administration pushing a looser regulatory approach and amid continued uncertainty from the ongoing tariff war, investors are once again turning to Spacs as flexible vehicles—especially in sectors like cryptocurrency, which have shown renewed speculative energy. “Right now it’s all crypto,” said a Cayman Islands-based lawyer attending the event, citing several recent deals that emulate MicroStrategy’s bitcoin-heavy model.

A changed crowd and cautious optimism

While prominent Spac figures like Michael Klein and Alec Gores were absent, attendees included industry lawyers from Loeb & Loeb and White & Case, as well as executives from smaller banks like BTIG and Cohen & Co. “There’s a spring in everyone’s step,” one attendee noted, referencing a clear contrast to the disillusionment of previous years.

A return by Goldman Sachs, after a three-year hiatus, was one of the major talking points on the conference floor. But rather than expressing anxiety, smaller players remained confident. “The pie is big enough for everyone,” said one investment banker, while others noted that more large firms would return once deal flow and fees became impossible to ignore.

Lessons from the past—and a pivot to quality

Panel sessions throughout the week emphasized lessons from the 2021 bust. Organizers encouraged renewed diligence, a focus on solid revenue models, and greater selectivity in merger targets. This pivot to quality was seen as crucial to avoiding another wave of underperforming Spac-backed companies.

Still, the speculative nature of many new deals—particularly those tied to crypto ventures—suggests some old habits persist. But this time, the supply appears more measured, with one banker noting, “In 2021 it was completely oversaturated. [Now] there’s not so much supply that we’re going to get ourselves into trouble again.”

With IPO markets still largely paralyzed and risk assets rebounding, the Spac world may have found its second wind—albeit one that looks a little more disciplined, and a lot more digital.