What happened

Good Works Acquisition Corporation (GWAC), a special purpose acquisition company (SPAC), is moving higher today. As of 3 p.m. EST, shares of the blank check company had risen by about 13% for the day.

So what

The reason for the SPAC's move is that it announced its acquisition target, and investors appear to be excited about it. Good Works will be merging with Cipher Mining, which is a subsidiary of Bitcoin (BTC -1.87%) hardware and software maker Bitfury.

Stacks of gold coins with Bitcoin symbols.

Image source: Getty Images.

Cipher Mining's vision is to become the largest-scale Bitcoin mining platform in the United States, with as much as 745 megawatts (MWs) of deployed capacity expected to roll out between 2021 and 2025. But it's important to note that Cipher is a newly formed company and doesn't yet have any operations. Its first data-center mining operation is expected to go online in the fourth quarter of 2021. The idea is that the company will leverage its relationship with hardware maker Bitfury, as well as its scale, to create a competitive advantage in the cryptocurrency mining business.

The deal values Cipher at $2 billion, and this includes $595 million in cash that is expected to be injected into the business upon the closing of the transaction. This consists of the $170 million Good Works raised in its SPAC IPO and a $425 million private investment in public equity (PIPE).

Now what

The transaction is expected to be finalized in the second quarter, and if the recent surge in cryptocurrency interest (and values) continues, Cipher has significant value-creation potential. But like any pre-revenue company, this is a highly speculative investment and should be approached with that in mind.