From Passive to Active: How 21Shares Is Shaping the Future of Crypto ETFs

Cryptocurrency exchange-traded products (ETPs) and exchange-traded funds (ETFs) are at a critical turning point. After an initial phase dominated by passive products such as Bitcoin and Ethereum spot ETFs, market focus is gradually shifting toward more flexible, yield-oriented active management strategies. Leading global digital asset management firm 21Shares recently stated that active management will become the core driver shaping the next phase of crypto ETFs. This assessment not only reflects evolving market demand but also signals a shift in industry product structures from simple “price tracking” to diversified “strategy creation.” Based on public statements from 21Shares executives, combined with market data and industry trends, this article provides a structured analysis and projection of this trend.

The Rise of Active Management: Why Is It a Focus Now?

Duncan Moir, President of 21Shares, mentioned in an interview that as the market matures, the development of crypto ETFs and ETPs will go beyond basic price tracking, with active management strategies playing a key role. He believes that because cryptocurrencies are an emerging and rapidly growing asset class, they are particularly suitable for active management intervention. 21Shares has begun expanding its investment and trading teams and plans to launch more sophisticated active products to meet investor demand for higher yields and refined risk management.

From Passive to Active: The Clear Evolution of Products

The development trajectory of the crypto ETF market clearly outlines a shift from passive to active strategies.

• Early Stage (2021-2023): Focus on passive products like Bitcoin and Ethereum futures ETFs in North America and spot ETPs in Europe. The main drivers were compliance and accessibility, with investors primarily seeking exposure to underlying crypto prices.
• Maturation Phase (2024-2025): With approval and listing of spot Bitcoin and Ethereum ETFs in the U.S., passive products experienced explosive growth, attracting significant capital inflows. Market infrastructure improved, and investors’ basic allocation needs were initially met. Meanwhile, more complex products began to emerge, such as ETFs incorporating staking features to generate additional yields.
• New Phase (2026 onward): The passive market becomes saturated, competition intensifies. Issuers seek differentiation, and active management strategies become a new breakthrough. 21Shares’ announcement marks this trend moving from the periphery to the center, as the industry explores how to capture alpha, manage volatility, and build more diversified portfolios through active management.

Data Breakdown: Growth Potential of Active Management Products

In terms of assets under management, active strategies already hold a significant position in traditional finance. According to Morningstar and Goldman Sachs Asset Management, by the end of 2025, global actively managed ETFs will approach $1.8 trillion in AUM. This large base indicates broad investor interest worldwide.

In the crypto space, the potential for active management can be viewed through several structural dimensions:

Analysis indicates that active ETFs in crypto can effectively address limitations of passive products in high-volatility, less-efficient markets. For example, through active timing, asset rotation, or yield enhancement strategies (like staking), they can reduce drawdowns in bear markets and boost returns in bull markets.

Market Perspectives: Divergent Views and Recognized Disagreements

Regarding the trend of “active crypto ETFs,” market opinions are diverse:

• Supporters (e.g., 21Shares): The crypto market is still in early stages, with information asymmetry and inefficient pricing creating significant value for active management. By combining top-down macro strategies with bottom-up asset research, active management can better identify opportunities, manage risks, and deliver returns beyond simple price tracking.
• Skeptics: The core of active management lies in stock picking and timing, which is difficult to sustain in highly volatile crypto markets. High management fees and uncertain alpha generation may conflict. Moreover, lower transparency of active strategies complicates investor assessment of product value.
• Regional Differences: As 21Shares notes, investor demand varies significantly by region. In the U.S., interest remains focused on mainstream assets like Bitcoin and Ethereum; in Europe, with a more mature investor base, institutions are actively seeking exposure to new assets and application layers (e.g., DeFi protocols, Layer 2 solutions) after holding core assets. These differences create diverse market opportunities for various active strategies.

Logical Validation: Authenticity and Risks Behind the Narrative

The narrative that “active management will dominate the next phase” needs to be examined in the context of current market conditions.

• Issuers (including 21Shares, BlackRock, etc.) are actively developing active or yield-enhanced products. For example, 21Shares has launched ETPs linked to MicroStrategy preferred shares, and BlackRock has introduced Ethereum products with staking features on Nasdaq. These are factual product innovations.
• The success prospects of active strategies in crypto ETFs are forward-looking judgments by market participants. The logic is that high volatility and information asymmetry in crypto markets allow professional research and management to create value. Theoretically valid, but actual outcomes depend on market validation.
• Based on current trends, future crypto ETF markets may bifurcate: low-cost core passive ETFs for basic exposure, and strategy-diverse, higher-fee active ETFs for professional investors and those seeking alpha. Whether active products can reach or surpass passive ones depends on their ability to generate sustained, reliable excess returns.

Reshaping the Landscape: Multi-Dimensional Impact of Active Strategies

The rise of active management will have multi-faceted effects on the crypto industry:

• On Product Issuers: Competition will shift from “first-to-market” to “strategy development and research capability.” Issuers need to build strong internal research teams with macro analysis, on-chain data interpretation, and risk management skills to design competitive active strategies.
• On Investors: Investment options will diversify significantly. Investors can allocate to asset classes and specific strategies (momentum, yield, macro hedging, etc.). This requires higher discernment to evaluate managers’ skills and strategy effectiveness.
• On Crypto Assets Themselves: More complex product structures (including staking, derivatives hedging) imply deeper institutional participation and closer ties to traditional financial markets. This could accelerate market maturity but also introduce systemic risks, such as “crowded trades” during stress periods.
• On Market Structure: The increase in active products will heighten demand for reliable data, pricing benchmarks, and liquidity solutions. This may foster auxiliary services like specialized index providers and on-chain data analytics firms.

Future Projections: Three Possible Directions for the Crypto ETF Market

Based on current conditions, several potential evolution paths can be envisioned:

Conclusion

21Shares’ insights accurately capture the pulse of crypto ETF evolution. The shift from passive to active strategies signifies not only product diversification but also a maturing market. It reflects investors’ transition from simple speculation to seeking more sophisticated, professional asset management. This process will test issuers’ research and innovation capabilities and expand investor choices. The future landscape of crypto ETFs will be shaped by the synergy of active and passive strategies, with the ultimate success depending on investors’ understanding and risk management skills.