Crypto prime broker FalconX reached an agreement to acquire 21shares, one of the largest issuers of digital-asset exchange-traded products, in a deal expected to close by year-end. The transaction, which follows $375 million and $1 billion acquisitions announced this week by Coinbase Global Inc. and Ripple Labs Inc., reflects increased dealmaking in the cryptocurrency sector as regulatory conditions improve under the Trump administration.
What to Know:
- FalconX will acquire Switzerland-based 21shares, which manages over $11 billion in assets, while maintaining the firm's independent operations and leadership structure
- The deal comes amid a wave of consolidation in the crypto sector, driven by substantial inflows into U.S. Bitcoin exchange-traded funds and expectations of more favorable regulatory oversight
- 21shares will retain CEO Russell Barlow and continue operating its existing exchange-traded products without changes to investment objectives or fund construction
Regulatory Shift Drives Consolidation
The acquisition combines two companies that bridge cryptocurrency markets and traditional finance during a period of renewed dealmaking activity. Strong capital flows into U.S. Bitcoin ETFs have provided momentum, alongside early regulatory actions by President Donald Trump aimed at creating a more accommodating environment for digital assets.
Coinbase announced plans this week to purchase investment platform Echo for $375 million.
Ripple Labs struck a separate agreement to acquire corporate treasury management firm GTreasury for $1 billion. The timing of these transactions suggests investors and companies see improved conditions for expansion in the sector.
FalconX issued an internal memo, reviewed by Bloomberg News, confirming the 21shares acquisition would preserve the Swiss firm's operational independence. Russell Barlow will continue as chief executive officer of 21shares. The memo indicated no changes are planned for existing 21shares ETPs or ETFs, including their construction or investment objectives.
Financial terms of the FalconX-21shares deal were not disclosed. Neither company responded to requests for comment. The Wall Street Journal reported the transaction earlier.
Track Records in Digital Markets
21shares was established in 2018 by Hany Rashwan and Ophelia Snyder as one of the first firms to launch regulated exchange-traded products tied to digital assets. The company offered institutional and retail investors access to Bitcoin, Ether and other cryptocurrencies through traditional investment vehicles. Switzerland-based 21shares now manages assets exceeding $11 billion across its product line.
San Mateo, California-based FalconX was founded the same year by CEO Raghu Yarlagadda.
The prime brokerage has processed over $2 trillion in trading volume since inception, according to the internal memo. The firm serves more than 2,000 institutional clients globally.
FalconX previously acquired Arbelos Markets earlier this year. Arbelos Markets specialized in trading crypto derivatives. That transaction signaled FalconX's intent to expand its service offerings before the 21shares announcement.
The two firms plan to collaborate on developing investment products targeting growing institutional and retail demand for regulated digital assets. The memo outlined this joint product development as a priority following the acquisition's completion.
Understanding Key Terms
Exchange-traded products represent investment vehicles that track underlying assets and trade on stock exchanges like traditional securities. Digital asset ETPs allow investors to gain exposure to cryptocurrencies without directly purchasing or storing the coins. Prime brokers provide services to institutional clients including trade execution, lending, and custody.
Bitcoin exchange-traded funds have attracted significant capital inflows since launching in the United States. These funds hold Bitcoin directly or through derivatives, offering investors regulated exposure to the cryptocurrency through standard brokerage accounts. The products eliminate technical barriers associated with managing private keys and digital wallets.
Outlook for Sector Growth
The combined entity will operate during a period when institutional adoption of digital assets continues expanding. Regulatory clarity remains a priority for market participants seeking to build compliant businesses in the United States.
FalconX's acquisition of 21shares positions the firm to capture both institutional demand for prime brokerage services and retail interest in regulated investment products. The deal is expected to close by December 31, pending customary approvals.
