Crypto Prime Broker FalconX Acquires 21Shares to Expand into Crypto ETFs

Highlights:

• FalconX to acquire 21Shares to penetrate the ETF market and broaden institutional crypto investment products.
• The acquisition facilitates the introduction of structured products and derivatives other than basic spot ETFs.
• FalconX explores IPO plans in 2025 as institutional demand increases and the crypto markets have regulatory clarity.

FalconX, a digital assets prime broker, is moving to acquire 21Shares in a landmark deal in the M&A wave within the crypto industry. The deal, reported by The Wall Street Journal, will provide FalconX with a direct entry point on the ETF market. The financial terms were not disclosed, but the sources state that the deal is a combination of cash and equity.

This acquisition enables FalconX to expand its offerings beyond prime brokerage and liquidity. It will now provide crypto exchange-traded funds (ETFs), an area that remains appealing to institutional investors. Zurich-based 21Shares has more than 55 ETPs with a total value of assets exceeding $11 billion.

According to The Wall Street Journal, crypto trading firm FalconX has agreed to acquire 21Shares. Executives from both companies said the merged entity will focus on developing crypto funds based on derivatives and structured products. Deal terms were not disclosed, but the…

— Wu Blockchain (@WuBlockchain) October 22, 2025

FalconX to Acquire 21Shares for Market Expansion

The two companies were established in 2018 and have complementary strengths to offer. FalconX has completed more than 2,000 institutional clients who have traded more than $2 trillion worth of cryptocurrency. Meanwhile, 21Shares has been at the forefront with crypto ETFs and set up one of the first U.S. spot Bitcoin ETFs with ARK Invest in 2024.

This acquisition combines 21Shares, an experienced player in regulated fund products, with FalconX, which has a strong trading infrastructure. They are jointly targeting derivatives and structured crypto investment vehicles. These products are not restricted to basic spot exposure; they have innovative investment products.

FalconX recently launched a 24/7 OTC options platform, which accepts Bitcoin, Ethereum, Solana, and other tokens. The integration with 21Shares reinforces its role in the ETF market and accelerates new product development.

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ICYMI: FalconX has launched 24/7 Electronic Options, bringing OTC crypto trading into the modern era.

Here’s why it matters 🧵 pic.twitter.com/dZEJixCZOp

— FalconX (@FalconXGlobal) October 1, 2025

Growing Institutional Momentum and Future Listing Plans

Interest in cryptocurrency by institutions has grown significantly over the last year. Recently, the U.S. Securities and Exchange Commission approved new listing standards for crypto ETFs and allowed faster approvals and simpler launches. This policy change has increased competition among asset managers and brokers.

As FalconX proceeds to acquire 21Shares, the new company can now compete in the market on a more even footing alongside industry leaders at BlackRock and/or Fidelity. Both companies perceive this step as a way to meet the rising institutional demand in a controlled and diversified fund structure.

FalconX is also considering a public offering in 2025. There have been early talks with banks and advisors indicating that the company is gearing up to go public on a major U.S. exchange. The IPO would also give the company more capital to expand its operations and appeal to traditional finance investors.

CEO Raghu Yarlagadda said:

“Bitcoin flows are now occurring under what we call traditional wrappers, and it is a paradigm shift.”

Broader Industry Impact and Future Outlook

This deal shows the increase in the number of cryptocurrency mergers and acquisitions due to the improved regulatory clarity. Major acquisitions under the current U.S. administration include Ripple purchasing GTreasury at a cost of $1 billion and Coinbase acquiring Echo for $375 million.

This trend is an indicator of the institutionalization of the digital asset industry. The purchase of 21Shares provides FalconX with a decisive advantage in the development of regulated investment products, as well as increases its coverage of Europe, where 21Shares has had long-term dominance. Yarlagadda also confirmed that the operations of 21Shares will not be affected due to the acquisition. However, the integration process starts instantly and is focused on the launch of joint ETFs. Although there was no given timeframe, both companies expect high execution.