FalconX to buy ETF firm 21Shares to enter structured crypto products

TLDR

• FalconX will acquire 21Shares using a mix of cash and equity.
• 21Shares recently launched a new ETP for an AI-linked crypto token.
• The acquisition gives FalconX ETF management and structured product access.
• FalconX recently joined a blockchain liquidity alliance to enhance services.

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FalconX, a major digital assets prime brokerage, is acquiring crypto exchange-traded product (ETP) issuer 21Shares in a move that broadens its offerings. The deal, reported by The Wall Street Journal, signals FalconX’s entry into the ETF space as institutional demand for digital asset exposure grows. This acquisition reflects a broader industry trend as firms adapt to evolving client needs and market structure.

FalconX to Enter ETF and ETP Market Through Acquisition

FalconX, known for its digital asset brokerage services, is acquiring 21Shares, a Switzerland-based issuer of crypto-focused exchange-traded products. The deal, structured with a mix of cash and equity, has not disclosed its financial terms.

The move positions FalconX to expand beyond its core services of liquidity and market making. With the addition of ETF and ETP offerings, FalconX can now offer institutions a wider range of products tied to cryptocurrencies. This marks an important development in its strategy to meet growing institutional demand.

FalconX’s entry into the ETF space comes as more firms look to combine traditional financial instruments with digital asset exposure. 21Shares manages a suite of exchange-traded products that track the price of various crypto tokens, which are listed primarily on European exchanges. This acquisition gives FalconX access to that product base and infrastructure.

21Shares Adds Value With Recent Market Activity

21Shares recently launched a new exchange-traded product linked to an AI-related crypto token, further expanding its portfolio in Europe. The product reflects the firm’s effort to keep up with market trends and investor interest in emerging tokens.

Founded in 2018, 21Shares has built a strong presence in Europe, with a range of ETPs covering popular digital assets like Bitcoin and Ethereum. It was among the first companies to launch crypto ETPs, giving investors easier access to crypto markets through traditional exchanges.

The company’s offerings allow regulated exposure to digital assets without needing to hold the underlying tokens. These products have gained traction among European investors looking for structured access to crypto. Now, with FalconX’s acquisition, the reach and distribution of these products are expected to grow.

FalconX Broadens Its Service Capabilities

FalconX, headquartered in the United States, offers prime brokerage services including trade execution, credit, and clearing solutions for digital assets. By acquiring 21Shares, it plans to broaden its portfolio into structured products and derivatives, two areas that require specific regulatory and operational infrastructure.

The acquisition also aligns with FalconX’s recent steps to grow its market-making capabilities. Earlier this year, FalconX joined a liquidity alliance with a major blockchain network. This partnership aims to improve on-chain liquidity, allowing the firm to offer tighter spreads and more efficient trade execution.

By combining ETF products with its existing services, FalconX will be able to serve clients across a broader range of investment strategies. The firm aims to create a full-service platform for institutions entering or expanding in the crypto space.

Market Consolidation Continues as Institutional Interest Grows

This acquisition is part of a broader trend in the crypto industry, where companies are consolidating to build more complete offerings. As institutional investors seek safer and regulated ways to invest in crypto, firms like FalconX and 21Shares are adapting to meet that demand.

With more institutions seeking exposure to digital assets through familiar investment vehicles, demand for crypto ETFs and structured products is growing. Acquisitions like this one allow companies to respond quickly to client needs while expanding their capabilities.

A spokesperson familiar with the matter told The Wall Street Journal that the acquisition will position FalconX to better serve institutional clients with a wide range of crypto-linked investment products. The closing date of the transaction has not been confirmed.

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