Exchange-traded funds are the hottest topic in crypto right now. Wall Street firms like BlackRock are jockeying with blockchain natives like Grayscale to get a piece of a new crypto ETF market that analysts predict will soon become worth billions of dollars.
I recently spoke with Ophelia Snyder, who founded Switzerland-based 21Shares, which is the biggest crypto ETF player in Europe, where the products have been legal for years. She believes the American market is ripe for the picking and on Tuesday her firm rolled out five funds that will actively manage a variety of Bitcoin and Ethereum futures products in an ETF wrapper.
Snyder says the inspiration for 21Shares came from her mother, who took an interest in Bitcoin way back in 2013 but complained she didn’t want to sign up for a new brokerage or exchange just to get some. To that end, 21Shares has made its name in Europe with crypto products it touts as extremely secure and easy to buy on familiar stock-trading platforms.
In this context, the U.S. does sound like easy pickings at a time when Bitcoin and Ethereum futures ETFs have only been up and running for a few months, and where regulatory approval for a crypto spot ETF is expected to land in coming weeks. The challenge, though, is that 21Shares has plenty of company and it’s far from clear there will be enough to go around for everyone in the crypto ETF market.
Even though 21Shares is new to the ETF game, and is launching its U.S. futures funds months after other firms did the same, Snyder says its active management approach stands out. There is something to this. I’ve written repeatedly that the complexity of futures products (contango anyone?) means ordinary investors should stay the hell away unless they want to get eaten for breakfast by traders with math Ph.Ds. The hands-on approach of 21Shares, however, means that customers can leave the technical trading to the company’s pros, while investing in a fund that promises to bring in more yield than if they had just bought Bitcoin or Ethereum directly.
There is also the question of how a European financial brand will fare on this side of the Atlantic. Other big fintech and crypto players from Europe and the U.K. (think eToro or Revolut) have tried to crack the U.S. market and had to retreat. 21Shares, however, has an ace up its sleeve on this front in the form of a tie-up with billionaire Cathie Wood’s Ark Invest—a well known U.S. hedge fund familiar to many here.
The big prize for 21Shares and Ark Invest, along with at least a dozen others, will be up for grabs in January with the expected launch of a Bitcoin spot ETF. But for now, the performance of 21Shares’ new crypto futures funds may be a good indicator of how the big European brand will fare in what’s expected to be a bruising fight for U.S. market share.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
DECENTRALIZED NEWS
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The CBOE will expand its crypto services to let customers trade Bitcoin and Ether futures on margin starting in January. (WSJ)
The Solana rally has cooled off, though other altcoins including Filecoin and Polygon have soared in recent days. (Decrypt)
XRP briefly jumped in response to a fake filing on an official state of Delaware website that suggested BlackRock was creating an XRP-based ETF. (Bloomberg)
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