FalconX, a leading digital asset prime brokerage, announced on October 22, 2025, that it has agreed to acquire 21Shares, the company behind the world's largest suite of cryptocurrency exchange-traded products.

This acquisition marks one of the most significant transactions in the crypto ETP sector and represents FalconX’s third major deal in 2025.

The financial terms were not disclosed, but the deal will be financed through a combination of cash and equity. According to Bloomberg, the transaction is expected to close by the end of the year.

Understanding 21Shares and Its Market Position

21Shares has established itself as a dominant player in the crypto investment product space since its founding in 2018 by Hany Rashwan and Ophelia Snyder. The Swiss-based company manages over $11 billion in assets across 55 listed products as of September 30, 2025.

The company’s flagship product is the ARK 21Shares Bitcoin ETF (ARKB), which holds nearly $5 billion in assets. ARKB was one of the first spot Bitcoin ETFs to launch in the United States in January 2024, marking a watershed moment for institutional crypto adoption. The fund allows investors to gain exposure to Bitcoin without directly holding the cryptocurrency.

Beyond ARKB, 21Shares operates an extensive lineup of crypto ETPs in Europe, offering exposure to various digital assets including Solana, Cardano, and Chainlink. The firm reached a significant milestone last month by listing its 50th ETP in Europe, demonstrating its continued expansion in regulated crypto investment products.

FalconX’s Growing Empire

FalconX has positioned itself as a critical infrastructure provider for institutional crypto trading. Co-founded by Raghu Yarlagadda, the company has facilitated over $2 trillion in trading volume and serves more than 2,000 institutional clients globally.

The company was valued at approximately $8 billion in a 2022 funding round led by Singapore’s sovereign wealth fund GIC and B Capital. This valuation more than doubled from its previous $3.75 billion valuation set in August 2021, reflecting strong investor confidence in the institutional crypto market.

FalconX operates as a prime brokerage, providing market-making, liquidity services, and trading infrastructure for hedge funds, asset managers, and other institutional players. The company also runs FalconX Bravo, which became the first CFTC-registered swap dealer focused specifically on cryptocurrency derivatives.

Strategic Rationale Behind the Deal

The acquisition aims to bridge the gap between institutional trading infrastructure and retail-accessible investment products. FalconX CEO Raghu Yarlagadda explained the vision: “We’re witnessing a powerful convergence between digital assets and traditional financial markets, as crypto ETPs open new channels for investor participation through regulated, familiar structures.”

Source: @FalconXGlobal

By combining FalconX’s deep liquidity pools and prime brokerage systems with 21Shares’ regulatory licenses and distribution network across Europe and the United States, the merged entity creates a comprehensive platform spanning the entire crypto investment value chain.

The combined company plans to focus on developing derivatives and structured crypto funds, moving beyond the basic spot ETPs that currently dominate the market. This strategy aligns with growing institutional demand for more sophisticated crypto investment vehicles.

Russell Barlow, CEO of 21Shares, emphasized the deal’s potential: “Together, we’ll pioneer solutions that will meet the evolving needs of digital asset investors worldwide.” Barlow will continue leading 21Shares, which will operate independently under the FalconX umbrella. Importantly, no changes are planned to existing 21Shares ETPs or ETFs.

Part of a Broader 2025 Expansion Strategy

The 21Shares acquisition represents FalconX’s third strategic transaction this year, signaling an aggressive expansion strategy:

In January 2025, FalconX acquired Arbelos Markets, a crypto derivatives platform, for an undisclosed amount. This deal strengthened FalconX’s capabilities in institutional derivatives trading.

In June 2025, the company acquired a majority stake in Monarq Asset Management’s parent company. Monarq, formerly known as MNNC Group, is a Cayman Islands-registered crypto hedge fund that manages several hundred million dollars in assets.

These acquisitions demonstrate FalconX’s ambition to evolve from a trading desk into a fully integrated financial institution for digital assets, offering services across trading, asset management, derivatives, and now ETP issuance.

FalconX has also expanded geographically, establishing operations in Latin America, Asia-Pacific, and Europe, alongside its existing presence in Silicon Valley, New York, London, and Hong Kong.

Industry Consolidation Accelerates

The FalconX-21Shares deal is part of a broader wave of consolidation sweeping through the crypto industry. A friendlier U.S. regulatory environment under the current administration has encouraged major transactions.

Other significant deals in 2025 include Coinbase’s $2.9 billion acquisition of Deribit, a derivatives exchange, and Kraken’s purchases of Small Exchange and NinjaTrader for a combined value exceeding $1.5 billion. These transactions reflect growing confidence in crypto’s institutional future and the need for companies to achieve scale.

The success of spot Bitcoin and Ethereum ETFs has created intense competition among asset managers to offer investors access to additional tokens and more sophisticated investment strategies through regulated products. Currently, 155 cryptocurrency-based exchange-traded product filings are awaiting SEC review, including products tracking Bitcoin, Solana, XRP, and Ethereum.

FalconX recently launched a 24/7 over-the-counter options platform supporting Bitcoin, Ethereum, Solana, and other tokens, positioning itself to capitalize on institutional demand for crypto derivatives.

The Road Ahead

This acquisition positions FalconX at the center of how institutions and retail investors access the crypto economy. By controlling both the trading infrastructure and the product issuance layer, FalconX can potentially accelerate product development and bring new investment vehicles to market faster than competitors operating in just one segment.

The founders of 21Shares, Ophelia Snyder and Hany Rashwan, expressed optimism about the partnership: “Over the past 8 years, we have built the 21shares business from $0 to more than $11 billion in AUM. We have scaled to reach millions of customers in every corner of the globe and brought them into crypto with our products and our research.”