21shares: Active Management is the Future of Crypto ETFs

• 21shares identifies a shift from passive price-tracking to active management as the next evolution for crypto exchange-traded products.
• Global active ETFs reached nearly $1.8 trillion in assets by late 2025, signaling a broader trend toward sophisticated investment strategies.
• New products are increasingly focusing on yield-generating features, such as staking rewards and exposure to high-yield capital strategies.

The Evolution of Crypto Investment Strategies

As the digital asset market matures, investor demand is moving beyond simple exposure to Bitcoin and Ether. Duncan Moir, president of 21shares, suggests that the nascent nature of the cryptocurrency asset class makes it uniquely suited for active management. To support this transition, the firm has expanded its trading and portfolio management teams, utilizing a combination of bottom-up research and quantitative top-down strategies to mitigate risk and optimize positioning.

The integration with FalconX, which acquired 21shares in October, is expected to accelerate the development of complex offerings. This move comes as the global market for active ETFs has swelled to nearly $1.8 trillion, according to data from Morningstar and Goldman Sachs Asset Management.

Regional Demand and Yield-Generating Assets

Market dynamics vary significantly by geography. In Europe, a more established investor base is looking for ways to expand existing allocations. In response, 21shares recently introduced an ETP linked to Strategy’s preferred stock (STRC), providing exposure to a high-yield instrument tied to Bitcoin-focused capital strategies.

Yield generation is becoming a central theme for new product launches. Notable developments in the sector include:

• BlackRock launched a Nasdaq-listed Ethereum product in March that incorporates staking, generating $15.5 million in trading volume on its first day.
• Grayscale has integrated staking into its ETPs, with its Ether funds being the first spot crypto ETFs in the United States to offer such rewards.

Strategy and Market Selection

When evaluating new product launches, 21shares relies on a three-pillar framework: internal research, client demand, and future market trends. This approach allows the firm to balance niche single-asset products with broader thematic offerings.

Moir highlighted the company’s Bitcoin-and-gold ETP as a successful example of thematic investing. Despite being live for four years and recently cross-listed in London, the product continues to deliver high risk-adjusted returns by combining the diversification benefits of both assets.