Crypto ETFs Shift to Active Management for Yield

Crypto exchange-traded funds are shifting from passive strategies focused on price tracking to active management that seeks yield and diversified exposure, according to Duncan Moir, president of asset manager 21Shares. In recent interviews, Moir highlighted the nascent nature of the cryptocurrency asset class as ideal for such approaches, allowing managers to adjust portfolios based on market trends and research.

This evolution reflects growing institutional demand for products that go beyond simply holding Bitcoin or Ethereum. Active exchange-traded funds globally manage nearly 1.8 trillion dollars in assets, a figure that underscores the broader trend in traditional finance now extending to crypto. 21Shares, which oversees more than 11 billion dollars across over 50 physically backed crypto exchange-traded products primarily in Europe, has expanded its portfolio management and trading teams to develop these sophisticated offerings. The firm was acquired by institutional crypto broker FalconX in October, a move expected to enhance product innovation through better execution and liquidity.

Moir explained that 21Shares employs a combination of bottom-up research on individual...