Exchange-traded funds are the hottest topic in crypto right now. Wall Street firms like black rock argue with blockchain natives like Shades of grey to get a piece of a new crypto ETF market that analysts say will soon be worth billions of dollars.
I recently spoke with Ophelia Snyder, who founded Switzerland-based 21Shares, which is the largest crypto ETF player in Europe, where the products have been legal for years. She believes the U.S. market is ripe for choice, and her firm launched five funds on Tuesday that will actively manage a variety of Bitcoin and Ethereum futures products in an ETF package.
Snyder says the inspiration for 21Shares came from his mother, who became interested in Bitcoin in 2013 but complained that she didn’t want to sign up for a new brokerage or exchange just to get some . To this end, 21Shares has made a name for itself in Europe with crypto products that it presents as extremely secure and easy to purchase on familiar stock trading platforms.
In this context, the United States seems like an easy choice at a time when Bitcoin and Ethereum futures ETFs have only been operational for a few months and regulatory approval for a crypto spot ETF is expected to arrive in the coming weeks . The challenge, however, is that 21Shares has a lot of company and it is far from clear that there will be enough to go around in the crypto ETF market.
Even though 21Shares is new to the ETF game and launched its U.S. futures funds months after other firms did the same, Snyder says its active management approach stands out. There’s something there. I have written several times that the complexity of futures products (contango anyone?) means that ordinary investors should stay away unless they want to be eaten for breakfast by traders with PhDs in mathematics. 21Shares’ hands-on approach, however, means that clients can leave the technical trading to the company’s professionals, while still investing in a fund that promises to return more than if they had just purchased Bitcoin or Ethereum directly.
There is also the question of how a European financial brand will behave on this side of the Atlantic. Other big fintech and crypto players from Europe and the UK (think eToro or Revolut) tried to break into the US 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 American hedge fund that many here are familiar with.
The grand prize for 21Shares and Ark Invest, along with at least a dozen others, will be up for grabs in January with the planned launch of a spot Bitcoin ETF. But for now, the performance of 21Shares’ new crypto futures funds could be a good indicator of how the big European brand will fare in what is expected to be a fierce fight for U.S. market share.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
This story was originally featured on Fortune.com
