FalconX to buy out crypto asset ETF firm 21Shares

Crypto trading platform FalconX is planning to acquire ETF asset manager firm 21Shares in one of the largest mergers in the cryptocurrency financial industry this year.

According to a report by the Wall Street Journal, the digital asset trading platform FalconX is set to acquire one of the largest managers of exchange-traded funds in a landmark deal. Executives from both companies confirmed that the merger would establish a combined company that would focus on developing crypto funds centered around derivatives and structured products.

The amount of funds used to acquire 21Shares was not disclosed by either company, but it was revealed that the deal was financed through a mix of cash and equity.

The acquisition comes at a time when crypto ETFs are picking up speed after the Securities and Exchange Commission significantly shortened the approval timeline for ETFs from 270 days to just 75 days. The decision gave way to a rise in crypto-backed ETF applications, with asset managers scrambling to apply for more crypto ETFs in hopes of bringing them into the market.

According to data from Solid Intel, the number of crypto ETF filings has surged to 155 within the span of a year, spanning across 35 digital assets.

Established in 2018, 21Shares has grown into one of the largest crypto-focused asset management firms, handling more than $11 billion in assets across 55 listed exchange-traded products as of September 2025. 21Shares is well regarded for launching one of the first spot Bitcoin ETFs (BTC) in the U.S in partnership with Cathie Wood’s ARK Investment Management, ARK 21Shares Bitcoin ETF.

At press time, ARK 21Shares Bitcoin ETF has seen inflows amounting to $162.85 million within the past 24 hours, trailing just behind BlackRock’s IBIT with inflows of $210.9 million. The product’s cumulative net inflow has increased to $2.22 billion as of Oct. 22.

Overall, the U.S BTC Spot ETF market has seen a total of $477.19 million inflows, with Ark & 21 Shares’ Bitcoin ETF being in the top five largest contributors.

FalconX expands into structured products through 21Shares

As the number of crypto ETFs increases, so does investor appetite for more structured crypto products. The crypto ETF market started off with funds backed mostly by Bitcoin and Ethereum (ETH); now it has expanded with the launch of ETFs that invest in smaller altcoins.

FalconX co-founder Raghu Yarlagadda said that through the merger, the combined company will be able to bring products into the market at a faster pace.

“Bitcoin flows are now happening through what we call traditional wrappers, and that’s a fundamental shift in market structure,” said Yarlagadda in a statement to the Wall Street Journal.

FalconX started primarily as a prime brokerage and trading infrastructure firm that offers services such as liquidity provision and over-the-counter options, while 21Shares has product‐management expertise in issuing ETPs that track the value of underlying crypto assets.

The acquisition provides FalconX with an instant foundation in terms of getting its foot in the door for regulated investment vehicles instead of having to build them from scratch. With a bigger platform, the combined company could accelerate product launch, offer more crypto-backed products globally, and possibly attract larger institutional clients.