21Shares, one of Europe’s largest crypto exchange-traded product issuers, is positioning actively managed digital asset ETPs as the next major evolution in the sector, with president Duncan Moir arguing that crypto’s structural inefficiencies make it particularly well-suited to active portfolio management.
The Swiss-based firm, which lists over 40 crypto ETP products across European exchanges, has been building out dedicated trading and portfolio management teams to support the shift from purely passive index-tracking products to discretionary and quantitative active strategies.
$100B+
Global crypto ETP assets under management (early 2025)
Source: 21.co Research
What 21Shares Means by Active Crypto ETP Products
Passive crypto ETPs track a fixed index or single asset, offering exposure without any portfolio adjustment. Active ETPs, by contrast, use discretionary or algorithmic management to dynamically rebalance holdings, rotate across sectors, and adjust risk exposure based on market conditions.
21Shares’ pivot frames this as a “next phase” for the industry, a strategic milestone that moves crypto investment products closer to the managed fund structures institutional allocators are accustomed to in traditional finance. Active ETFs globally held roughly $1.8 trillion in assets by the end of 2025, according to Morningstar and Goldman Sachs data, suggesting significant room for crypto-native active products to capture institutional demand.
The firm already has a track record with hybrid strategies. Its Bitcoin-and-gold ETP has been live for four years and delivered strong risk-adjusted returns, serving as an early proof of concept for multi-asset crypto management. More recently, 21Shares launched a Strategy Yield ETP (STRC) on Euronext Amsterdam in February 2026 and a spot Sui ETF in the US the same month.
The central question the market is now asking: is active management in crypto a genuine upgrade for investors, or primarily a fee-generating product pivot for issuers?
The Bull Case: Why Active Management Could Unlock Crypto Alpha
Moir’s core argument rests on crypto’s structural characteristics. Unlike mature equity markets where information is widely distributed and pricing is efficient, digital asset markets remain fragmented across dozens of exchanges, with uneven liquidity and wide dispersion in token performance.
As Moir explained in an interview with CoinTelegraph, the era of uniform crypto price movement is ending.
“We are moving beyond the phase where all digital assets moved in lockstep with Bitcoin. Different sectors are developing their own market cycles.”
That divergence creates windows for skilled managers to outperform passive benchmarks by rotating across assets and reducing exposure during drawdown cycles, something a static index product cannot do. The volatility that recently drove an $80 million DeFi exploit is the same market characteristic that active managers argue makes skilled oversight essential.
Institutional demand supports the thesis. Institutional allocators now account for roughly 38% of total spot Bitcoin ETF holdings, and many of these allocators are accustomed to managed strategies with risk guardrails rather than pure passive trackers. Bitcoin and Ethereum spot ETFs accumulated $31 billion in net inflows during 2025, with trading volume reaching approximately $880 billion.
21Shares has invested directly in building the capability. Moir noted the firm has hired portfolio managers and traders with backgrounds distinct from its existing passive operations.
“We’ve had to hire and build out the team with people who have different trading and portfolio management expertise, but now we have a solid team and we think we’ll be able to deliver strong actively managed products.”
The competitive landscape also favors early movers. BlackRock, which manages more than $130 billion across crypto-related ETPs, launched a staked Ethereum ETF (ETHB) on Nasdaq in March 2026, recording $15.5 million in trading volume on its debut day. Grayscale introduced staking across its ETPs in October 2025. But both remain largely in the passive or semi-passive space, focused on yield enhancement rather than discretionary active management.
No major US issuer has yet launched a fully discretionary actively managed crypto ETF, giving 21Shares a potential first-mover advantage, particularly in European markets. Emerging yield-bearing crypto strategies like those from Lombard and Bitwise demonstrate growing institutional appetite for more sophisticated digital asset products beyond simple spot exposure.
Moir highlighted a geographic divergence in that appetite.
“The interest is still concentrated in the larger coins in the US. In Europe, institutional clients are more interested in newer assets and the application layer beyond the layer-1s.”
That European institutional interest in altcoins and application-layer tokens aligns naturally with active strategies that require deeper research and selective positioning.
The Bear Case: Fees, Complexity, and the Passive Performance Record
The skeptical counterargument draws heavily from traditional finance’s decades-long active-versus-passive debate. SPIVA data consistently shows that the majority of active equity funds underperform their passive benchmarks over 10-year periods. There is no structural reason crypto should be exempt from this pattern over the long term.
Active ETPs typically carry significantly higher expense ratios than passive trackers. In traditional markets, the fee differential often compounds into meaningful drag on net returns, and crypto’s higher base volatility could amplify that effect.
Crypto’s 24/7 global market structure introduces unique operational risks for active managers. Unlike equities with defined trading hours, crypto requires continuous monitoring, execution across fragmented venues, and exposure to regulatory patchwork across jurisdictions. These factors increase both cost and execution risk.
The regulatory picture adds further uncertainty. Over 130 crypto ETF filings are currently under SEC review in 2026, and while new generic listing standards have cut approval timelines from roughly 240 days to 60-75 days, actively managed structures face additional scrutiny around portfolio transparency and disclosure requirements. Regulators including the CFTC’s new crypto innovation task force are still defining the framework for these products, and 21Shares’ new CEO Russell Barlow is pursuing a FINMA license as a 2026 objective.
40+
21Shares crypto ETP products listed across European exchanges
Source: 21Shares product catalog
FalconX’s acquisition of 21Shares in October 2025 is expected to accelerate product development, but execution remains unproven. The firm has not disclosed a specific timeline for its first actively managed product launch, and converting passive ETP infrastructure into active management capability is a meaningful organizational challenge.
Bitwise expects over 100 new crypto ETFs to launch in the US during 2026, meaning 21Shares will enter an increasingly crowded field. Whether active crypto ETPs can justify their higher fees through sustained outperformance will ultimately depend on whether crypto market inefficiencies persist as the asset class matures. For some institutional allocators, the risk management flexibility of active strategies may justify the premium. For others, the low-cost passive approach that has driven $31 billion in spot ETF inflows will remain the default.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
