FalconX is set to acquire 21Shares, a prominent player in the cryptocurrency exchange-traded fund (ETF) space, in a strategic move that marks one of the most significant consolidations within the digital asset financial sector this year. The acquisition signals FalconX’s entry into the structured product market, positioning the company to become a more comprehensive provider of crypto investment solutions.
The deal, which has not disclosed its financial terms, is being financed through a combination of equity and cash, according to executives familiar with the transaction. By bringing 21Shares under its umbrella, FalconX aims to strengthen its position in the rapidly evolving crypto ETF landscape, with plans to develop a variety of funds focused on derivatives and other structured products.
This acquisition comes amid a surge in activity within the crypto ETF space, fueled by a regulatory shift that has dramatically shortened the approval window for new ETF applications. Previously requiring up to 270 days for clearance, the U.S. Securities and Exchange Commission (SEC) now processes ETF filings in just 75 days. This regulatory change has triggered a wave of new applications from asset managers eager to capitalize on the growing demand for regulated crypto investment vehicles.
According to research from Solid Intel, the number of crypto ETF filings has ballooned to 155 over the past year, covering 35 different crypto assets. This spike in filings underscores the growing institutional interest in digital assets and the increasing legitimacy of crypto investment products.
Founded in 2018, 21Shares has become one of the most influential firms specializing in digital asset management. As of September 2025, the company has over $11 billion in assets under management, spread across 55 listed ETPs (exchange-traded products). Among its most notable achievements is the launch of one of the first U.S. spot Bitcoin ETFs in collaboration with ARK Investment Management, led by Cathie Wood. The ARK 21Shares Bitcoin ETF has rapidly gained traction, recording inflows of $162.85 million over a 24-hour period, second only to BlackRock’s IBIT, which logged $210.9 million on the same day. In total, the ARK 21Shares Bitcoin ETF has seen net inflows of $2.22 billion as of late October.
The broader U.S. spot Bitcoin ETF market has also experienced strong momentum, with total inflows reaching $477.19 million in a single day. The ARK 21Shares fund ranks among the top five in this space, highlighting the firm’s influence and reach within the ETF ecosystem.
For FalconX, the acquisition of 21Shares represents a strategic leap. Known primarily as a prime brokerage and trading infrastructure firm, FalconX offers services such as liquidity provision, OTC trading, and market access for institutional clients. The merger gives FalconX immediate access to 21Shares’ expertise in crypto-backed ETPs and its regulatory-ready product lineup, eliminating the need to build such capabilities from the ground up.
Raghu Yarlagadda, co-founder of FalconX, emphasized the importance of integrating traditional financial structures with digital assets. “Bitcoin flows are now moving through traditional wrappers, which marks a fundamental shift in how the market is structured,” he said. With this acquisition, FalconX will be better equipped to bring new financial products to market more efficiently, expanding the reach of crypto investment instruments to both retail and institutional investors.
In recent years, the scope of crypto ETFs has widened. While early offerings were largely centered on Bitcoin and Ethereum, the market has evolved to include funds that provide exposure to smaller altcoins and diversified digital asset baskets. This diversification reflects growing investor sophistication and demand for more nuanced exposure to the crypto space.
The merger between FalconX and 21Shares also comes at a time when institutional interest in digital assets is accelerating. Traditional financial institutions, hedge funds, and family offices are increasingly exploring crypto as a legitimate asset class, and the availability of regulated, transparent products like ETFs makes entry into the market more accessible and less risky.
Additionally, the combination of FalconX’s trading infrastructure and 21Shares’ product development capabilities could lead to the creation of hybrid financial instruments, such as actively managed crypto funds, leveraged ETPs, or yield-generating structured products. These innovations could differentiate the merged entity in a crowded marketplace and attract sophisticated investors looking for advanced strategies.
From a global perspective, the acquisition positions the combined company to expand its footprint beyond the U.S. and Europe. With regulatory clarity improving in regions like the Middle East and parts of Asia, FalconX and 21Shares could target emerging markets where investor appetite for crypto products is growing but options remain limited.
Moreover, the synergy between the two firms opens up opportunities for technology integration. FalconX’s trading algorithms, data analytics, and risk management systems could enhance the performance and transparency of 21Shares’ ETPs. This integration may also lead to the development of real-time, dynamically adjusted crypto investment products that respond to market conditions.
There’s also the potential for the combined entity to play a more active role in shaping regulatory frameworks. With increased scale and influence, FalconX-21Shares could engage with policymakers to advocate for clearer, innovation-friendly regulations that balance investor protection with technological progress.
In the long term, this merger could redefine what a modern digital asset financial institution looks like. By blending trading infrastructure, asset management, and product innovation under one roof, FalconX and 21Shares are setting the stage for a new era in crypto finance—one that’s more accessible, regulated, and aligned with the expectations of institutional investors.
As the crypto ETF market continues to mature, consolidation like this will likely become more common, as firms seek to pool resources, streamline operations, and gain competitive advantages in a fast-moving industry. With this acquisition, FalconX has positioned itself at the forefront of that trend, potentially reshaping the landscape of regulated crypto investment products for years to come.