Actively Managed Crypto ETF/ETP Could Be the Next Evolutionary Step for 21Shares

21Shares is shifting focus toward actively managed crypto exchange-traded products (ETPs) as the market matures. The firm's president, Duncan Moir, said this evolution is natural for an asset class still in its early stages. Active strategies allow for more nuanced risk management and positioning in a volatile market.

The shift from passive to active management is being driven by growing investor sophistication. European institutions, in particular, are showing strong interest in emerging tokens and application-layer projects. This trend contrasts with the U.S. market, where demand remains focused on Bitcoin and Ethereum.

21Shares has already launched an ETP in Europe linked to Strategy preferred shares (STRC), which provides exposure to Bitcoin capital strategies. The product has seen robust demand, suggesting growing appetite for active crypto investment strategies.

Why Is Active Management Gaining Momentum in Crypto?

The nature of the crypto asset class makes it well suited for active management. Unlike traditional markets, where passive indexing is dominant, crypto's volatility and innovation cycle require more dynamic strategies. 21Shares combines bottom-up research with top-down risk management to build these products.

The firm has expanded its trading and portfolio management teams to support the development of more sophisticated offerings. This expansion is being accelerated by its integration with FalconX, which acquired 21Shares in October.

How Are Institutional Investors Responding to This Shift?

Institutional investors are increasing their exposure to digital assets, with 73% planning to boost allocations in 2026. They are prioritizing regulated access points like ETFs and ETPs, which offer more transparency and compliance. This trend is supported by surveys indicating that nearly 66% of institutions now use spot ETFs or ETPs for crypto exposure.

The demand for active strategies is also being fueled by improved infrastructure and custody solutions. Investors are adopting multi-custodian setups to enhance security and reduce operational risk. Stablecoins are also gaining traction as a tool for settlement and internal cash management.

What Are the Key Growth Areas for 21Shares and the Industry?

Staking has emerged as a major growth area in the crypto space, allowing investors to earn yield by securing blockchain networks. 21Shares and other firms are exploring products that integrate staking with spot exposure. The firm has also launched products that simplify tax treatment for European investors.

Looking ahead, regulatory clarity will be a key factor in scaling institutional adoption. Clear frameworks will help firms like 21Shares expand their offerings to new markets. The firm will continue to evaluate new products based on internal research, client demand, and market trends.