The SPAC boom is losing steam. Here are 3 signs the high-flying market is coming back down to earth.

• SPACs have raised more money in the first three months of 2021 than all of 2020, but the market may be losing steam.
• The recent performance of blank-check companies has disappointed in the last month.
• Also, firms and individual investors are increasingly growing cautious about the risks of SPAC investing.
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SPACs have raised more money so far in 2021 than all of 2020, but there's some signs that the market is losing steam.

Here are three recent trends that show that the high-flying SPAC market may be coming back down to earth.

(1) SPAC IPO prices are fizzling

It's been a rough month for blank-check companies that have gone public. According to Dealogic data compiled by Reuters, 93% of SPACs that went public over the last week are trading below par value or $10 per share.

Additionally, the biggest first-day gain of a SPAC IPO this month was a mere 3.5% for Supernova Partners Acquisition Co II Ltd on March 1. That pales in comparison to to January's first-day pop of 32.5% for Altimeter Growth Corp II and February's best first-day jump of 24.9% for CM Life Sciences II.

SPCX-an exchange traded fund that generally holds shares of SPACs looking for target companies to acquire-is down 6% over the last month. However, it has still returned 10% year-to-date.

On March 8, JPMorgan said in a note that the recent acceleration of SPACs suggested a peak for the sector rather than the middle of a boom cycle. They cited recent drawdowns in SPAC performance relative to the benchmark S&P 500 index to back up their view.

The strategists didn't detail when the peak would end, but said it's reasonable to assume that the monthly pace of SPAC transactions for the remainder of 2021 will slow.

(2) Companies that have gone public via a SPAC are also taking a hit

The SPXZ exchange-traded fund holds roughly two-thirds of SPACS that have chosen to take a company public and one third blank-check entities seeking start-ups. It's slumped 12% over the last month and lost 21% year-to-date.

In addition, the Defiance Next Gen SPAC Derived ETF (SPAK), an index-tracking fund that holds about 40% SPACs and 60% post-deal companies, is down 11.7% in the last month and down 8% year-to-date.

(3) Cooling investor sentiment

There's also signs that investors are growing increasingly cautious on the rise in SPACs. David Trainer, CEO of investment research firm New Constructs, told Insider that investors are beginning to see through the fragile economic foundations of certain SPACs and "deservedly cutting valuations."

On Wednesday, Billionaire investor Barry Sternlicht told CNBC on Wednesday the SPAC market is "out of control," while last month Berkshire Hathaway vice-chairman Charlie Munger said the SPAC craze "must end badly," but he isn't sure when it will happen.

Much of the criticism of SPACs stems from the fact that they don't face as much regulatory scrutiny as a traditional IPO before going public.

UBS is barring its financial advisors from pitching certain SPAC stocks to its clients because of a lack of information and research on the blank-check investment vehicles prior to their mergers with private companies.

JPMorgan says that SPACs have been used for decades but appear to progress through boom and bust cycles.

The boom is typically driven by momentum, then imitation from sponsors, investors and target companies looking to take advantage of strong demand. Meanwhile, the bust occurs when too many poor quality players emerge, investor excitement fizzles and regulatory concerts arise, the firm said in a note.

Still, some see the recent pullback in SPACs as a temporary dip, and even a buying opportunity for investors who missed the beginning of the SPAC market's bull run.

Sylvia Jablonski, Defiance ETFs chief investment officer, told Insider that recent fluctuations in the 10-year Treasury yield may have impacted investor interest in growth companies, the kinds of companies SPACs typically target.

"In my mind, this is a perfect opportunity for buying on a dip as the long term prospects for the world's most innovative, disruptive and new emerging technologies will likely reward investors over time," Jablonski said.

David Trainer said it's unclear if the SPAC mania is truly over. He said given the wild ride GameStop has been on of late, "there appears to be no end to the gullibility of a large number of investors."