A U.S.-based Bitcoin mining firm, named Cipher Mining Inc., will result from the merger between Bitfury subsidiary Cipher Mining Technologies Inc. and Good Works Acquisition Group, in a special purpose acquisition company (SPAC) deal.
The combined company is valued at $2 billion. Plans are in place to list it on the NASDAQ under the ticker symbol “CIFR.”
Bitcoin going mainstream
MicroStrategy CEO Michael Saylor noted the new firm will join the growing list of Bitcoin-related companies on the NASDAQ. Already listed are Riot Blockchain (RIOT), Marathon Patent Group (MARA), and Canaan (CAN).
We will soon have another publicly traded #Bitcoin miner. https://t.co/cuVp2WOmHV
— Michael Saylor (@michael_saylor) March 5, 2021
The Chairman of Good Works, Doug Wurth, said the firm has a long history in alternative asset markets. His belief in the growing crypto ecosystem meant Cipher Mining presented an irresistible opportunity.
What’s more, its relationship with Bitfury brings several advantages. This includes access to top-level mining equipment, proven operations development, management, and maintenance experience. Wurth added that he’s committed to helping the firm become the leading Bitcoin mining company in the U.S.
Tyler Page, CEO of Cipher Mining, said that Bitcoin mining firms were typically smaller, undercapitalized, and lacked experience in the past. But under this new deal, Cipher Mining has the necessary resources to take advantage of the situation presented.
“We believe that our U.S. domicile provides us additional advantages of low-cost, reliable power and a transparent, stable and secure regulatory and corporate environment. This combination of factors positions us to become the leading Bitcoin miner and also enables future vertical integration opportunities across the Bitcoin ecosystem.”
Bitfury is headquartered in Amsterdam, Netherlands, and has been a leader in emerging technologies since 2011. In addition to its Bitcoin mining operations, it also offers a suite of blockchain solutions such as investigative software and a blockchain-as-a-service package.
Why are SPACs all the rage?
A special-purpose acquisitions company (SPAC) is a shell company formed by investors with the sole intent of raising money through an IPO. The goal is to acquire another company eventually.
SPACs do not have any commercial operations in that they don’t make or sell anything. Usually, a SPACs only asset is cash raised in its own IPO.
SPACs have existed for decades, but they’ve become more prevalent in recent times due to extreme market volatility. This is partly due to the changing macroeconomic landscape brought about by the ongoing panic situation.
A significant advantage of this setup over a normal IPO is that going public is significantly quicker.
“Due to its lack of fundamental operation, both financial statements and prospectus filed during a SPAC IPO are significantly shorter and can be prepared in a matter of weeks (compared to months for a traditional IPO). There are no historical financial results to be disclosed or assets to be described, and business risk factors are minimal.”
With that in mind, Cipher Mining is likely looking to strike while Bitcoin is riding its bull phase.