v3.25.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Financial assets and liabilities that are measured at fair value on a recurring basis are classified as Level 1, Level 2 and Level 3 as follows (in thousands):
As of March 31, 2025
TotalLevel 1Level 2Level 3
Assets:
Crypto Assets1,138 — 1,138 — 
Total Assets$1,138 $— $1,138 $— 
Liabilities:
Warrant liability - Class 1 and Class 2 warrants13,104 — — 13,104 
Warrant liability - public warrants1,571 1,571 — — 
Total Liabilities$14,675 $1,571 $— $13,104 

As of December 31, 2024
TotalLevel 1Level 2Level 3
Liabilities:
Warrant liability - Class 1 and Class 2 warrants42,782 — — 42,782 
Warrant liability - public warrants4,141 4,141 — — 
Total Liabilities$46,923 $4,141 $— $42,782 
The carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivables, unbilled accounts receivables, due from related party, deposits with clearinghouse, due to related party, accounts payable and accrued liabilities, and operating lease obligations approximate their fair values due to their short-term nature. The balance of deposits with clearinghouse not invested in U.S. government securities are in the form of cash, and therefore approximate fair value.
The fair value of our crypto assets was determined using Level 2 inputs which included using the value of the crypto asset determined as the mid-point of a bid-ask spread in the market we determined to be the principal market for the related crypto assets as of March 31, 2025.
Our Public Warrant liability is valued based on quoted prices in active markets and is classified within Level 1.
Since the second quarter 2024, our Class 1 Warrants and Class 2 Warrants were valued using the Black-Scholes-Merton model and a binomial lattice model, respectively, both of which utilize certain Level 3 inputs. Prior to the second quarter of 2024, our Class 1 Warrants and Class 2 Warrants were valued using the Black-Scholes-Merton model and a Monte Carlo simulation, respectively. A significant input to the Monte Carlo simulation included the volatility of movement in the price of the stock underlying the warrants, which was estimated using the historical volatility of our Class A Common Stock over the contractual period of the warrant.
The significant unobservable inputs used for the fair value measurement of our Class 1 Warrants and Class 2 Warrants liabilities as of March 31, 2025 are summarized as follows:
Expected term (years)4.43
Continuous risk-free rate3.86%
Expected volatility125.0%
The preceding methods described may produce fair value calculations that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although we believe our valuation techniques are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
As described in Note 5, fair value of the Company's owned crypto assets are determined using Level 2 inputs as the mid-point of a bid-ask spread in the market we determined to be the principal market for the related crypto assets.