Ben Strack

<div id="highlights-block_6345d2e3b78ee" class="highlights">
 <ul>
 <li>The Middle East received $270 billion worth of crypto between July 2020 and June 2021 — a 1,500% increase from the year prior</li>
 <li>The firm plans to expand into about a dozen more regions, executives of 21Shares’ parent company told Blockworks after its $25 million raise in September</li>
 </ul>
 
</div>



The world’s largest crypto ETP issuer has brought the first physically backed bitcoin ETP to the Middle East as the firm continues expanding globally after a fresh round of funding.&nbsp;



21Shares’ new product is listed on Nasdaq Dubai, marking the company’s first entry into the region. The company lists 46 products across 12 exchanges in seven countries.



The launch comes after <a href="https://cms.blockworks.co/21shares-parent-company-valued-at-2b-after-marshall-wace-led-fundraise/" target="_blank" rel="noreferrer noopener">the firm raised $25 million last month</a> in a funding round led by hedge fund Marshall Wace — giving the company a roughly $2 billion valuation. Hany Rashwan, CEO of 21Shares parent company 21.co, previously told Blockworks that the firm wants all its products — ranging from single-asset crypto ETPs to indexes — in “every single geography.”



The executive called the Middle East “a crypto hotspot,” pointing to the region’s standout year-over-year growth in crypto value received amid currency devaluation concerns in a number of its countries.&nbsp;



The Middle East received $566 billion in cryptocurrency from July 2021 to June 2022, according to a Chainalysis <a href="https://blog.chainalysis.com/reports/middle-east-north-africa-cryptocurrency-geography-report-2022-preview/" target="_blank" rel="noreferrer noopener">report</a> published last week, 48% more than they received the year prior.



“The region has become a hub for crypto companies and exchanges…especially following India’s decision to <a href="https://cms.blockworks.co/indias-crypto-tax-takes-effect-with-industry-fearing-it-will-stifle-growth/" target="_blank" rel="noreferrer noopener">tax earnings from crypto at 30%</a>,” Rashwan told Blockworks.



<blockquote class="wp-block-quote">“The Middle East’s level of interest and crypto-friendliness made it a prime market for expansion for 21Shares,” he said.</blockquote>



After Dubai <a href="https://cms.blockworks.co/dubai-is-the-latest-government-to-roll-out-crypto-law-set-up-regulator/" target="_blank" rel="noreferrer noopener">revealed its first cryptocurrency legislation</a> in March, the emirate granted virtual asset licenses to <a href="https://cms.blockworks.co/ftx-granted-crypto-license-with-dubai-hq-in-sights/" target="_blank" rel="noreferrer noopener">FTX</a> and <a href="https://cms.blockworks.co/binance-granted-license-to-operate-in-dubai/" target="_blank" rel="noreferrer noopener">Binance</a> that month. Kraken <a href="https://cms.blockworks.co/kraken-receives-abu-dhabis-first-virtual-asset-exchange-license/" target="_blank" rel="noreferrer noopener">revealed plans</a> to expand to the UAE in April — opting for neighboring emirate Abu Dhabi — while others such as <a href="https://cms.blockworks.co/crypto-com-secures-provisional-approval-to-open-crypto-exchange-in-dubai/" target="_blank" rel="noreferrer noopener">Crypto.com</a>, <a href="https://cms.blockworks.co/okx-to-expand-in-uae-after-dubai-regulatory-approval/" target="_blank" rel="noreferrer noopener">OKX</a> and <a href="https://cms.blockworks.co/crypto-custodian-komainu-follows-exchanges-to-dubai/" target="_blank" rel="noreferrer noopener">Komainu</a> have also flocked to the area.



Sherif El-Haddad, formerly head of asset management at Al Mal Capital, <a href="https://cms.blockworks.co/21shares-adds-execs-as-part-of-global-expansion/" target="_blank" rel="noreferrer noopener">joined 21Shares in August</a> as the company’s head of the Middle East.



“Cryptocurrencies are fast becoming the asset of the future for investors and wealth managers around the world, as global crypto adoption and investment levels continue to accelerate at pace — and the Middle East is a major accelerator of this growth,” El-Haddad said in a statement.



“The UAE, and broader [Gulf Cooperation Council], is a market of significant strategic importance to our business, and we are excited about the opportunity this market opens to us,” he added.



21Shares <a href="https://cms.blockworks.co/first-australian-spot-bitcoin-ether-etfs-to-go-live-next-week/" target="_blank" rel="noreferrer noopener">launched the first bitcoin and ether ETFs in Australia</a> in May. Executives said last month that the firm is seeking to expand into about a dozen more regions but declined to share specific areas.



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21Shares Brings First Spot Bitcoin ETP to Middle East

<div id="highlights-block_63174ebf8960c" class="highlights">
 <ul>
 <li>London-based hedge fund Marshall Wace has previously invested in Circle, ConsenSys, Lukka and TRM Labs</li>
 <li>“We want all of our products in every single geography,” 21.co CEO said</li>
 </ul>
 
</div>



Investors have valued the parent company of the world’s largest issuer of crypto ETPs at $2 billion during its latest fundraise, as the firm seeks to grow its product suite and expand to a dozen or so more regions.



21.co, the Switzerland-based parent company of crypto ETP issuer <a href="https://21shares.com/" target="_blank" rel="noreferrer noopener">21Shares</a>, token provider <a href="https://amun.com/" target="_blank" rel="noreferrer noopener">Amun</a> and issuance platform Onyx, raised $25 million, the firm said.



“We build bridges to make it possible for people to connect TradFi and crypto,” 21.co co-founder Ophelia Snyder told Blockworks. “That’s all we do, and we do it in a few different ways.”



<a href="https://www.mwam.com/about-us/" target="_blank" rel="noreferrer noopener">Marshall Wace</a> is cutting the largest check, as the London-based hedge fund continues its investments in crypto-focused companies. The company, founded in 1997, manages $55 billion in assets.&nbsp;



Other investors in the round include Collab+Currency, Quiet Capital, ETFS Capital and Valor Equity Partners.



Amit Rajpal, Marshall Wace’s CEO of Asia, called 21.co “a first-mover in the crypto industry” in a statement, noting that the company “has the potential to revolutionize the industry globally.”&nbsp;



The company declined to comment further for this story.&nbsp;&nbsp;



Marshall Wace led the <a href="https://cms.blockworks.co/crypto-asset-software-firm-lukka-hits-unicorn-status-after-110m-series-e/" target="_blank" rel="noreferrer noopener">$110 million Series E round</a> for crypto asset software and data provider Lukka in January. The investment came a month after the hedge fund participated in a $60 million <a href="https://cms.blockworks.co/trm-labs-lands-60-million-series-b-round/" target="_blank" rel="noreferrer noopener">Series B round for TRM Labs</a>.&nbsp;



More recently, Marshall Wace participated in the funding rounds for ConsenSys and Circle in March and April, respectively.&nbsp;



“They have a very large network in the financial services industry,” 21.co CEO Hany Rashwan told Blockworks. “We’re working with them…to expand our footprint and do partnerships.”&nbsp;



<h3 class="wp-block-heading">Growth plans</h3>



From September 2021 to September 2022, 21.co recorded roughly $650 million in net new assets and grew its headcount 75% during that span.



The latest fundraise is the company’s first in more than two years.&nbsp;



“The real impressive stat is we’ve gotten to this $2 billion valuation off of just raising $10 million, and that’s, I would argue, a pretty good use of capital,” Rashwan said. “It’s important for our customers to realize how large a company they’re entrusting their funds with and to have that clarity.”



In addition to sending a message to 21.co customers, the raise will allow the company to accelerate its growth in more parts of the world and be well-positioned to execute potential acquisitions, executives said.&nbsp;



21Shares <a href="https://cms.blockworks.co/first-australian-spot-bitcoin-ether-etfs-to-go-live-next-week/" target="_blank" rel="noreferrer noopener">launched the first bitcoin and ether ETFs in Australia</a> in May and seeks to bring similar offerings to the Middle East in about a month, Rashwan said. The company is also seeking to expand into about a dozen more regions, he added, declining to share specific areas.&nbsp;&nbsp;



“We obviously have a very global footprint and we’re not done,” the CEO said.



21Shares <a href="https://cms.blockworks.co/21shares-vying-to-build-out-crypto-winter-suite/" target="_blank" rel="noreferrer noopener">launched its Bitcoin Core ETP (CBTC)</a> on the SIX Swiss Exchange in June as the first offering in a so-called crypto winter suite. It added to the lineup the following month with <a href="https://cms.blockworks.co/21shares-expands-crypto-winter-product-lineup/" target="_blank" rel="noreferrer noopener">risk-controlled bitcoin and ether ETPs</a> that seek to replicate benchmarks by S&amp;P Dow Jones Indices.



“You should expect to see more single-assets, more indexes, more partnerships and more strategies overall,” Rashwan said. “We want all of our products in every single geography. We’re working on that.”



In the US, 21Shares has re-submitted an application for the proposed spot bitcoin ETF it first <a href="https://cms.blockworks.co/ark-files-for-bitcoin-etf/" target="_blank" rel="noreferrer noopener">proposed with Ark Invest in June 2021</a>. The SEC, which has yet to approve such a fund, rejected the offering earlier this year.&nbsp;



Cathie Wood, Ark Invest’s CEO and chief investment officer, previously invested in 21.co and is an independent board member of the company.&nbsp;



“When I first met the team at 21.co, I understood their long-term vision and truly believed the company would transform the crypto ecosystem,” she said in a statement. “This round is a testament to 21.co’s early success and its ability to thrive in both bull and bear markets.”



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21Shares’ Parent Company Valued at $2B After Marshall Wace-led Fundraise

<div id="highlights-block_62bcaeb209177" class="highlights">
 <ul>
 <li>New vehicle is set to lend a portion of its underlying crypto to offset operating costs</li>
 <li>WisdomTree executive says “we are not shifting our strategy amidst current conditions”</li>
 </ul>
 
</div>



Swiss crypto fund issuer 21Shares has launched the first in a planned series of offerings designed to help investors navigate an upside-down crypto market.



The asset manager brought to market the 21Shares Bitcoin Core ETP (CBTC) on the SIX Swiss Exchange on Wednesday. It’s an exchange-traded product (ETP), the equivalent to an exchange-traded fund (ETF) in the US.



With an expense ratio of 21 basis points, CBTC is set to lend a portion of the underlying crypto on a fully collateralized basis to offset operating costs once the product scales.



“The markets influence how we think about innovation and building new products,” CEO Hany Rashwan told Blockworks in an email. “Releasing CBTC, the cheapest physically-backed ETP in the world, was designed to offer investors a more comfortable entry point to access a critical asset class during a choppy market and helps them to optimize portfolio returns.”



21Shares is building additional bear market-friendly funds slated to launch in the second half. Such offerings would include lower-cost products for long-term strategic allocation, or others for investors after shorter-term tactical allocation or risk-controlled exposure.



Lara Crigger, editor-in-chief of investment research firm VettaFi, told Blockworks interest in bearish products is abundant.



<a href="https://cms.blockworks.co/proshares-to-launch-first-us-etf-thats-bearish-on-bitcoin/" target="_blank" rel="noreferrer noopener">ProShares launched an ETF</a> last week that aims to deliver the inverse of the performance of the S&amp;P CME Bitcoin Futures Index. The fund has grown to nearly $30 million in assets.



Though not a short product, 21Shares’ approach to offer long bitcoin exposure in an ETP with a relatively low expense ratio is attractive, Crigger said. She noted its “unique characteristic” to lend out the underlying bitcoin could bring down costs even more.



“If you believe that bitcoin is currently in a bear market, but that it will one day reverse and rebound, then &#8216;buying the dip&#8217; with a low-cost exposure like this particular ETP is a cost-effective way to stay invested and express that view,” Crigger said.



Rashwan said 21Shares investors are “holding strong and still creating inflows for the long game” — despite market turbulence. The firm notched nearly $30 million in new net assets since mid-May, as 21Shares’ Bitcoin ETP (ABTC) represented roughly 30% of the total.



<h3 class="wp-block-heading">Competitors focused on long-term outlook</h3>



Townsend Lansing, head of product at 21Shares competitor CoinShares, said the firm has not considered launching a product that uses yield to offset operating costs, as CBTC does.



He added that when examining yield products, the company looks for opportunities that offer yield beyond a reduction in the management fee. CoinShares launched physically backed Cosmos and Polygon ETPs that offer exposure to the underlying tokens, plus an additional 5% per year.



“We run a diligence process on all new launches that looks at the coin, the protocol, the founders and other risk metrics, which of course include current and past market dynamics,” Lansing told Blockworks in an email. “Having said that, we tend to take a longer term view with our product strategy, and would tend to be unswayed by shorter-term trends unless they change the risk analysis of the product being launched.”



Will Peck, head of digital assets at fund group WisdomTree, said the company always considers ongoing market conditions and trends when developing new products.



“However, we are fully focused on a long term outlook,” Peck said. “Despite what some are calling the &#8216;crypto winter,&#8217; our long term perspective is that there will be continued adoption of digital assets and technology over time, so we are not shifting our strategy amidst current conditions.”



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21Shares Vying To Build Out ‘Crypto Winter’ Suite

Sebastian Sinclair

<div id="highlights-block_625f26542e72b" class="highlights">
 <ul>
 <li>21Shares, which has products listed on 10 regulated European exchanges, will feature two spot crypto ETFs</li>
 <li>The firm’s pair of ETFs are set to launch the same day as a fund proposed by Cosmos Asset Management, which intends to invest in shares of a Canadian bitcoin ETF</li>
 </ul>
 
</div>



The first Australian ETFs to invest directly in bitcoin and ether are set to hit the market next week while US fund issuers continue to work with regulators to secure a listing.



Switzerland-based 21Shares, the world’s largest issuer of crypto exchange-traded products (ETPs), has teamed up with ETF Securities to launch the funds.



The ETFS 21Shares Bitcoin ETF (EBTC) and the ETFS 21Shares Ethereum ETF (EETH), which track the price of bitcoin and ether in Australian dollars, are fully backed by the respective assets held in cold storage by Coinbase.



Both ETFs are expected to list on the Cboe Australia exchange on April 27.



21Shares CEO Hany Rashwan told Blockworks the firm has been working to provide Australian investors easier access to crypto for years. Running the world’s longest-running spot bitcoin ETP, which launched in Switzerland in 2019, the firm has navigated everything “from contentious forks to stock splits,” he added.



“That valuable experience and deep data is consistently instrumental in all of our regulatory conversations,” Rashwan said. “There’s more to crypto than just bitcoin and ethereum, and we look forward to making the entire crypto world accessible and investable for everyone around the world.”



While ETFs investing directly in cryptoassets have launched across Europe, Canada and elsewhere, the products break new ground for Australia, whose regulators have previously viewed the digital assets as volatile and unfit for the country’s financial markets.



<a href="https://cms.blockworks.co/nfts-taxed-inadvertently-says-australian-senator-during-sydney-art-exhibit/" target="_blank" rel="noreferrer noopener">Some efforts</a> from the country’s political elite signal a willingness to work constructively with crypto proponents in a bid to usher in a new age for Australian investors backed by appropriate <a href="https://cms.blockworks.co/australia-seeks-licensing-of-crypto-exchanges-via-digital-services-act/" target="_blank" rel="noreferrer noopener">legal frameworks</a>.



Those promises are being bolstered by attempts to push the country’s forward-thinking approach toward greater digital asset adoption including the private sectors’ experimentation with the nascent asset class.



Last month, <a href="https://cms.blockworks.co/anz-becomes-first-bank-to-mint-australian-digital-dollar/" target="_blank" rel="noreferrer noopener">Australia’s ANZ Bank</a> became the first major financial institution in the country to issue and execute payment of a stablecoin linked to the nation’s dollar. A green light from the country’s primary clearing house marks yet another step along Australia’s journey to crypto adoption.



Indeed, the Australian Financial Review reported Tuesday that <a href="https://cms.blockworks.co/australia-gets-go-ahead-to-list-countrys-first-bitcoin-etf-next-week/" target="_blank" rel="noreferrer noopener">Cosmos Asset Management</a> would launch the country’s first bitcoin ETF on April 27. Instead of direct spot exposure, Cosmos’ fund is expected to invest in crypto through Purpose Investments’ bitcoin ETF — which launched on Canada’s Toronto Stock Exchange in February 2021.



21Shares has roughly $2.5 billion in assets under management. Its products are listed on 10 regulated European exchanges.



“Once we decided to build a range of crypto ETFs for the Australian market, there was only one partner we wanted to work with,” Graham Tuckwell, executive chairman of ETF Securities Australia, said in a statement. “[21Shares’] pioneering approach to secure investment in cryptocurrency has been emulated by other fund managers around the world.”



21Shares has launched a handful of ETPs this year, including products with Aave (AAVE), Chainlink (LINK) and Uniswap (UNI) as their underlying assets. Rashwan <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">previously told Blockworks</a> that the firm aims to support what it considers to be the top 50 cryptocurrencies by the end of the year.



The pending launches come as the SEC continues denying spot bitcoin ETF proposals from US fund issuers. Crypto firm executives <a href="https://cms.blockworks.co/crypto-execs-read-the-tea-leaves-on-spot-bitcoin-etf-approval/" target="_blank" rel="noreferrer noopener">remain split</a> on when exactly such a product could be approved.



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First Australian Spot Bitcoin, Ether ETFs to Go Live Next Week

<div id="highlights-block_62054c5fec1ea" class="highlights">
 <ul>
 <li>Firm expects further growth of Decentraland and the broader metaverse sector as it predicts that users will continue to distrust Facebook</li>
 <li>21Shares CEO Hany Rashwan previously said the firm looks to launch ETPs, supporting what it considers to be the top 50 cryptocurrencies by the end of 2022</li>
 </ul>
 
</div>



21Shares continues its product launching spree by bringing to market the first exchange-traded products (ETPs) focused on Decentraland (MANA) and FTX Token (FTT).



The products were set to begin trading on Thursday in Switzerland.



“Adding the world&#8217;s first NFT &amp; single Metaverse ETP and one of the world&#8217;s leading crypto exchanges to our product suite is a key milestone for us in making crypto accessible for everyone,” 21Shares CEO Hany Rashwan said in a statement.



Decentraland is the first decentralized and user-owned virtual reality platform that allows users to create, experience and monetize content and applications.



MANA’s market capitalization is about $5.1 billion, according to CoinGecko. Its price of $3.35 was up 31% from seven days ago, as of noon ET on Thursday.



By launching a product with exposure to MANA, the firm is offering its clients access to the latest Web3 use case, a 21Shares spokesperson told Blockworks.



21Shares noted in its <a href="https://fs.hubspotusercontent00.net/hubfs/5994002/State-of-Crypto-issue5-by21Shares.pdf?hsCtaTracking=f488c39b-ed17-4ba1-9f9b-9262eee45a67%7C1dae7f2e-2373-46bf-8b38-5956c8da79d2" target="_blank" rel="noreferrer noopener">State of Crypto report</a> published this week that the global augmented reality, virtual reality and mixed reality market is expected to reach roughly $300 billion by 2024, according to Statista.



The report adds that Ethereum-based virtual games Sandbox (SAND) and Decentraland rose by about 156,000% and 39,000% respectively in 2021.



“We anticipate that Decentraland and the metaverse sector is going to keep up with this adoption rate and awareness as users continue to distrust Facebook.”



Facebook parent Meta <a href="https://cms.blockworks.co/zuckerberg-still-confident-in-metaverse-plans-despite-stocks-20-slide/" target="_blank" rel="noreferrer noopener">reported a loss of more than $10 billion</a> from the company’s first forays into the metaverse during its latest earnings call.



Meanwhile, the 21Shares FTX Token ETP will invest in the token of crypto derivatives exchange FTX, which allows users to stake FTT, get trading fee discounts and participate in the community government voting.



“FTX Token is an attractive investment case, as it offers exposure to the third-largest crypto exchange in the world with over $2.5 billion in daily trading volume,” a 21Shares representative explained.



21Shares manages roughly $2 billion across 28 crypto ETPs and more than 100 listings.



The company <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">most recently launched</a> ETPs that have Aave (AAVE), Chainlink (LINK) and Uniswap (UNI) as underlying assets, also in Switzerland. Rashwan told Blockworks at the time that the firm aims to support what it considers to be the top 50 cryptocurrencies by the end of the year.



The firm evaluates new listings based on its trading metrics, team, investors, community and social reach, among other factors.



21Shares is also looking to build its presence in the US.



The firm hired Kayle Watson as its head of US sales in November, according to Watson’s LinkedIn page. Prior to joining 21Shares, he had spent about eight years at BlackRock, the world’s largest asset manager, serving as the director of its iShares institutional asset manager and hedge fund sales group.



“21Shares is looking to provide investors with the most innovative, physically-backed crypto ETPs and index solutions,” a spokesperson said. “Just as we have in Europe, where we’ve assembled the world’s largest product suite.”



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