FalconX Acquires 21Shares to Grow Crypto Product Range
FalconX, a crypto trading broker, will acquire asset manager 21Shares. The Wall Street Journal reported the deal on Wednesday. This merger will help FalconX expand its products beyond market-making and liquidity services.
Both companies said they will focus on creating crypto funds using derivatives and structured products. 21Shares is a leading provider of crypto Exchange Traded Products (ETPs). It offers over 50 listed products managing more than $11 billion in assets.
The deal was completed using a mix of cash and equity. FalconX was co-founded by Raghu Yarlagadda in 2018. The company has handled over $2 trillion in cryptocurrency trades for more than 2,000 institutional clients.
FalconX Expands Into Crypto ETFs Amid Regulatory Changes
FalconX’s move into crypto ETFs follows recent regulatory progress. The US passed the GENIUS Act, and the Securities & Exchange Commission (SEC) aims to create rules that support innovation and protect investors.
Crypto ETPs let investors track cryptocurrency prices through stock exchanges. The approval of Bitcoin spot ETFs in January 2024 changed the market outlook. It made Bitcoin more attractive to institutional traders as a mature asset.
What Are Crypto ETFs?
- ETFs are investment funds that track the price of assets or groups of assets. For example, a Bitcoin ETF tracks Bitcoin’s price.
- The first US Bitcoin futures ETF was approved by the SEC in October 2021. Seven Bitcoin futures ETFs are approved, with over 20 still pending.
- In January 2024, the SEC approved several Bitcoin spot ETFs. This opened the market to institutional and mainstream investors.
- Crypto ETFs allow exposure to cryptocurrencies without owning them directly. This lowers risk and cost for investors.
- However, investors do not have direct ownership of the crypto assets. ETFs also charge management fees, and price swings in crypto affect ETF values.
