For years, crypto was a backwater for mergers and acquisitions as it slowly recovered from the 2022 market crash under the gaze of hostile regulators. | Photo credit: FLORENCE LO
21shares has spent years building its crypto franchise outside of Wall Street’s sphere of influence. From Zurich, it launched exchange-traded products that gave European investors access to Bitcoin and Ether long before the US would allow it.
By now selling itself to FalconX – a crypto prime broker backed by Tiger Global and Singapore’s GIC – the company is trading autonomy for scale as crypto moves closer to the financial mainstream.
The deal underlines a broader shift: crypto specialists are entering traditional investment channels through regulated products. And the FalconX-21shares deal is part of a broader wave. Crypto M&A reached the $10 billion mark for the first time in the third quarter, a more than 30-fold increase from a year earlier, according to Architect Partners.
For years, crypto was a backwater for mergers and acquisitions as it slowly recovered from the 2022 market crash under the gaze of hostile regulators. Ten months after Donald Trump returned to the White House and transformed the Securities and Exchange Commission from an industry bogeyman to a key ally, the tables have turned.
Trump’s policies and the massive deals they brokered have changed the strategic calculus for companies like 21shares. Regulatory hurdles have eased and Wall Street stalwarts are starting to get into crypto – putting pressure on incumbents to build a competitive position around themselves.
“The regulatory environment ultimately allowed this to happen more quickly,” Russell Barlow, CEO of 21shares, said in an interview, declining to disclose the size of the deal. In terms of the roadmap, “what we thought we could do in five years, we can now compress into two to three years.”
For much of the past decade, the company has carved out a niche in Europe as US authorities blocked spot crypto ETFs. The SEC then lifted that ban under then-President Joe Biden in early 2024. Switzerland-based 21share was suddenly competing in a much more crowded field.
Speed comes at a cost: the same regulatory clarity that makes deals possible also invites new competition. Low-cost Bitcoin and Ether ETFs overseen by giants such as BlackRock Inc and Fidelity began attracting billions of dollars in investor flows and now have more than $173 billion in assets combined. BlackRock’s IBIT Bitcoin and its Ether ETF manage $87 billion and $15 billion respectively, compared to the total of $11 billion for 21 stocks across more than 50 products.
As crypto merges into the mainstream financial world, companies like FalconX and 21shares are racing to stay competitive in an increasingly crowded field, according to Nate Geraci of NovaDius Wealth Management.
“We are witnessing a land rush in crypto ETPs,” he said. “Now that new listing standards have been introduced, the floodgates will open – making this an ideal time for a deal like this.”
FalconX, founded in 2018 and valued at $8 billion in a 2022 funding round, earlier this year bought Arbelos Markets, a trading firm focused on crypto derivatives. Its capabilities in trading and financing now extend to creating products.
21shares will retain its 100-strong staff and operate independently, with plans to launch 18 US funds this year and expand into the Middle East and Asia. FalconX and 21shares aim to design strategies that weave digital assets into traditional markets, tokenized bonds and equities – for example using blockchain to settle transactions, Barlow said.
The partnership with FalconX-21 stocks is one in a series of multibillion-dollar bets that are redrawing the industrial map of crypto, alongside ETPs and prime brokerage. This year’s completed deals include several multi-billion dollar transactions. Coinbase Global Inc acquired derivatives platform Deribit for $2.9 billion in May, while Ripple spent more than $2 billion buying prime broker Hidden Road and corporate treasury firm GTreasury. Crypto targets have also attracted bidders from outside the sector, including CoreWeave Inc.’s bid. of $9 billion on Bitcoin miner and data center operator Core Scientific Inc. in July.
“Consolidation in crypto is forcing companies to vertically integrate,” said Karl-Martin Ahrend, co-founder of digital asset investment bank Areta. “Market makers, custodians and infrastructure players are moving closer to the end investor as ETFs and regulations open new channels for institutional capital.”
Fending off the giants
Some crypto heavyweights have already moved to tap into the recovery in sentiment, going public to build cash and gain firepower. Circle Internet Group Inc, publisher of the second-largest stablecoin, raised $1.1 billion in June, while exchange operator Gemini Space Station Inc. raised $425 million in September.
The question now is whether this burst of dealmaking will be enough to hold back global banks such as Goldman Sachs Group Inc and Citigroup Inc – and payments groups from Stripe Inc to Revolut Ltd – as they step in to exploit clearer regulation and rising demand for digital assets.
Traditional finance has scale and distribution on their side; crypto companies have speed and technical depth. The chance of that advantage is small, and consolidation may be the best opportunity to take advantage of it.
More stories like this are available at bloomberg.com
Published on October 24, 2025
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