FalconX acquires 21Shares to increase crypto ETF penetration and to add post-Wall Street institutional access to investing in digital assets.

FalconX, the American crypto trading giant, will acquire an offer of the digital asset exchange traded fund (ETF), 21Shares, indicating a key move into registered investment vehicles. The transaction is supported by both cash and equity and brings the institutional trading infrastructure of FalconX together with the ETF expertise of 21Shares to establish a new powerhouse in crypto finance.

The consolidated company intends to create new crypto funds extending to derivatives and structured products, as investor interest in conventional vehicles exposing investors to digital assets increases. Co-founded in 2018, FalconX has made trades worth over $2 trillion on behalf of its more than 2,000 institutional clients and is looking to go to the IPO after receiving a valuation of $8 billion.

A similar company, 21Shares, which was established in the same year, oversees 55 listed products worth 11 billion, and in 2024, it co-launched one of the first spot bitcoin ETFs in the U.S. with ARK Invest. The acquisition is in the face of changing regulatory clarity in the US, such as SEC-endorsed standards that allow the launch of crypto ETFs with a rapid rise in institutional investment.

According to the executives, this merger makes the combined entity a crypto ETF industry leader that connects Wall Street with the digital asset markets. The move by investors and market observers is taken as an indicator of the mainstreaming of crypto investment products and the beginning of further integration between traditional finance and digital assets.