FalconX, a U.S.-based institutional crypto prime broker, has announced its acquisition of 21Shares, a leading manager of exchange-traded products (ETPs) for digital assets.
The deal aims to combine FalconX’s trading and prime-brokerage infrastructure with 21Shares’ distribution and product expertise, enabling the launch of derivative-focused and structured crypto funds that go beyond traditional spot ETPs, according to The Wall Street Journal. Financial terms of the transaction were not disclosed.
Founded in 2018 by Raghu Yarlagadda, FalconX has reportedly processed over $2 trillion in crypto trades for more than 2,000 institutional clients. The acquisition positions FalconX as a significant player in the crypto ETF space, especially amid a more favorable regulatory environment in the U.S..
In September, the Securities and Exchange Commission (SEC) approved streamlined listing standards for crypto ETFs, reducing review times and encouraging faster product launches.
21Shares, founded the same year as FalconX, manages over $11 billion in assets across 55 ETPs, including bitcoin, ether, token-specific, and basket offerings.
The company gained prominence in 2024 when it partnered with Cathie Wood’s ARK Investment Management to launch one of the first U.S. spot Bitcoin ETFs. Its established distribution network and product engineering capabilities give FalconX immediate access to the growing ETF market.
The acquisition aligns with FalconX’s broader expansion into institutional derivatives. Last month, the firm launched a 24/7 over-the-counter options platform supporting Bitcoin, Ethereum, Solana, and other digital tokens.
The merger will also accelerate product development, allowing the combined company to respond quickly to rising institutional demand for crypto investment products.
The deal comes amid heightened competition in crypto fund management, with firms like BlackRock, Fidelity, Coinbase, and Kraken also pursuing ETF and derivative offerings.
Notable recent transactions include Coinbase’s $2.9 billion acquisition of Deribit and its $375 million purchase of Echo, as well as Kraken’s deals to acquire Small Exchange and NinjaTrader.
“Bitcoin flows are increasingly happening through traditional financial wrappers, which represents a fundamental shift in market structure,” Yarlagadda said.
The FalconX-21Shares merger positions the combined entity to become a leading provider of regulated crypto ETFs and derivative products, bridging traditional finance with the evolving digital-asset ecosystem.