FalconX acquiring 21Shares in cash-and-equity deal to expand into crypto ETFs

FalconX, the crypto brokerage founded by Raghu Yarlagadda in 2018, has agreed to acquire 21Shares, one of the biggest names in crypto exchange‑traded funds, according to the Wall Street Journal.

The companies reportedly said that the deal will merge their platforms to create a larger player focused on crypto investment products. The transaction was paid for using a mix of cash and equity, though neither side shared how much the acquisition was worth.

The new company will build crypto funds tied to derivatives and structured investment products, expanding how institutions gain exposure to the market. “Bitcoin flows are now happening through what we call traditional wrappers, and that’s a fundamental shift in market structure,” Yarlagadda said.

He also explained that the merger allows the firm to bring new products to market faster, something both companies have been pushing for as investor appetite grows.

FalconX expands into crypto ETFs amid trend of regulatory and corporate deals

FalconX, which has allegedly processed over $2 trillion in crypto trades for more than 2,000 institutional clients, is among a small group of private trading firms preparing for an eventual IPO on Wall Street.

Buying 21Shares gives it an instant foothold in the ETF business, especially now that regulators in Washington are softening their stance on crypto.

The U.S. Securities and Exchange Commission in September approved new listing standards for crypto ETFs, cutting down the review time and simplifying how new products can launch. That change has opened the door for faster approvals and drawn both Wall Street and crypto companies into the ETF race.

21Shares, founded the same year as FalconX, allegedly manages more than $11 billion in assets spread across 55 listed exchange‑traded products as of September. The firm became well known in 2024 when it partnered with Cathie Wood’s ARK Investment Management to launch one of the first U.S. spot Bitcoin ETFs.

The momentum behind Bitcoin ETFs has also pulled in giants like BlackRock and Fidelity Investments, whose launches have encouraged asset managers to design ETFs for smaller, riskier crypto tokens. That rush has intensified competition and pushed companies like FalconX to diversify beyond trading and into fund management.

The timing of this deal aligns with a broader crypto buying spree under President Trump, whose administration has taken a friendlier view toward digital assets. Several large acquisitions have followed that tone. Cryptopolitan reported just last week that Ripple purchased GTreasury, a corporate treasury‑software firm, for $1 billion.

And on Tuesday, we reported that Coinbase Global has sealed a $375 million agreement to acquire Echo, a blockchain platform that helps crypto companies raise capital directly on‑chain.

Yarlagadda said the integration process will begin immediately, though both companies declined to give a rollout schedule for their first joint ETF product. FalconX plans to keep 21Shares’ operations intact while expanding its presence in regulated markets through the deal. According to Bloomberg, FalconX last raised $150 million in venture funding in 2022, valuing it at $8 billion.

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