FalconX, an institutional crypto-prime broker, has agreed to acquire 21Shares, a prominent crypto asset manager specializing in exchange-traded funds (ETFs) and exchange-traded products (ETPs), as reported by The Wall Street Journal. The financial terms of the transaction were not disclosed, but regulatory filings indicate it will be funded through a combination of cash and equity.
Founded in 2018, FalconX has processed over $2 trillion in trades and serves more than 2,000 institutional clients, while 21Shares manages over $11 billion in assets across more than 50 listed crypto-ETPs, primarily on European exchanges. This acquisition marks a strategic pivot for FalconX to expand beyond its core market-making and liquidity services into issuing crypto funds and structured products.
FalconX CEO Raghu Yarlagadda stated that the combined entity will bring "crypto flows into traditional wrappers" faster and with broader institutional reach. Analysts note this aligns with a broader trend of increased institutional crypto-fund issuance, driven by eased regulatory pathways for crypto-ETFs and rising demand for regulated exposures. The deal could also accelerate FalconX's path to a U.S. IPO.
21Shares recently launched a new ETP linked to an AI-related crypto token, reflecting its adaptability to market trends. The acquisition is part of an ongoing wave of consolidation in the digital assets space, emphasizing a shift toward vertically integrated services that combine trading, custody, fund management, and regulated distribution.
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