In a landmark move for digital-asset investing, 21Shares (21Shares) has introduced the first U.S.-registered crypto market-index exchange-traded funds (ETFs) under the Investment Company Act of 1940 (commonly the “’40 Act”). The two funds, the TTOP (21Shares FTSE Crypto 10 Index ETF) and TXBC (21Shares FTSE Crypto 10 ex-BTC Index ETF), launched on November 13, 2025.
This development marks a major shift in how U.S. investors can gain exposure to a diversified basket of major cryptocurrencies through a regulatory framework traditionally used for standard mutual funds and ETFs, paving the way for broader, institution-friendly access to digital-asset markets.
Key Highlights
- The two ETFs are structured under the ’40 Act, which is the same regime that governs many conventional U.S. mutual funds and ETFs, rather than the more common securities-offerings regime (such as the Securities Act of 1933) used by many earlier crypto products.
- The TTOP fund tracks the FTSE Crypto 10 Select Index, a market-capitalization-weighted basket of the ten largest cryptocurrencies.
- The TXBC fund tracks the FTSE Crypto 10 ex-Bitcoin Select Index, offering diversified exposure excluding Bitcoin, designed to highlight other leading crypto networks and use-case tokens.
- The management fee for TTOP is approximately 0.50 % and for TXBC approximately 0.65 %.
- These two ETFs are considered the first of their kind under the ’40 Act in the U.S., representing a regulatory milestone for digital assets indexing.
Why This Matters
Until now, many U.S. crypto-investment vehicles have been structured as commodity pools, trusts, or under less-traditional fund frameworks. By launching crypto index ETFs under the ’40 Act, 21Shares is aligning digital-asset exposure with the same regulatory structure as many mainstream investment vehicles. This is likely to appeal to institutional investors and financial advisers seeking regulated, diversified access to crypto assets.
Further, a one-ticker solution that holds exposure to multiple cryptocurrencies can reduce the complexity and operational burdens (wallets, custody, individual token selection) associated with owning crypto directly. With quarterly rebalancing built into the index design, the funds aim to keep pace with evolving market leadership in the crypto-asset space.
Considerations & Risks
Investors should note that despite the familiar ETF structure, these funds still carry risks inherent to the underlying crypto-assets: elevated volatility, regulatory uncertainty, rapidly evolving technology, and network risk. The prospectus for TTOP explicitly states that the value of the fund could decline substantially, including the possibility of losing almost all invested value.
Furthermore, while the ’40 Act provides stronger investor protections compared to some earlier arrangements, this does not eliminate the novel risks of digital-asset markets. As always, past performance is not a guarantee of future results.
Institutional Context & Industry Implications
This launch comes at a time when the regulatory environment for crypto in the U.S. is evolving. With the U.S. Securities and Exchange Commission (SEC) pushing for more clarity and novel ETF structures (for example, generic listing standards approved earlier in 2025), this moment may signal the dawn of a new phase in crypto investments via regulated funds.
For 21Shares, this step reinforces its global leadership in crypto investment products. It also sets a precedent that may encourage other fund issuers to create diversified crypto index ETFs under the ’40 Act structure, potentially expanding choice and competition in the category.
FAQs
Q1: What is the ’40 Act and why is it significant for these ETFs?
A1: The Investment Company Act of 1940 governs many U.S. mutual funds and ETFs, providing investor protections, governance standards, disclosure rules, and regulatory oversight. By using this framework, the 21Shares ETFs offer crypto exposure under a more established, conventional fund structure, which may be more comforting to institutional investors.
Q2: What are the tickers and what do they track?
A2: The tickers are TTOP (21Shares FTSE Crypto 10 Index ETF) and TXBC (21Shares FTSE Crypto 10 ex-BTC Index ETF). TTOP tracks the FTSE Crypto 10 Select Index with the largest ten crypto-assets; TXBC tracks the FTSE Crypto 10 ex-Bitcoin Select Index, which excludes Bitcoin and focuses on other major networks.
Q3: Are these ETFs suitable for retail investors or only institutions?
A3: Although available to any qualified investor via brokerage accounts, the structure and fee levels suggest these funds may initially attract financial-adviser-led or institutional flows. That said, retail investors can participate if their brokerage allows. Because of the volatility and novelty of crypto assets, retail investors should proceed with due caution.
Q4: What are the risks associated with these funds?
A4: The risks include crypto-asset price volatility, regulatory uncertainty, custody and security risks of underlying tokens, potential tracking error versus the index, and the possibility of losing all or substantially all investment value. The prospectus for TTOP explicitly reminds investors of these risks.
Q5: How do these ETFs differ from the spot-Bitcoin or spot-Ethereum ETFs launched earlier?
A5: Many earlier crypto ETFs in the U.S. focused on a single token (e.g., Bitcoin or Ethereum) and were structured under different frameworks (e.g., the Securities Act of 1933 or commodity-pool frameworks). The 21Shares products are multi-asset (a basket of crypto-assets) and structured under the ’40 Act, offering broader diversification and a regulatory structure historically reserved for mainstream investment funds.
