ANALYSIS: SPACs—And the Next Trendy Innovation Going Mainstream

Upstart SPAC IPOs finished a record-breaking year that saw them outnumber traditional IPOs for the first time ever. This astonishing accomplishment was propelled by the pandemic and sustained, at least in part, by the regulatory arbitrage of how SPACs operate. That structure confers advantages, particularly at the M&A stage.

What might be the next big thing in finance? Building on blockchain and cryptocurrencies, decentralized finance (DeFi) is looking to have its moment. But investors in DeFi could benefit from some regulatory oversight in the future—just as SPAC founders are now reaping the rewards of regulation initiated years ago to ...