As one of the first companies ever, the Swiss fintech 21Shares has received approval for an exchange-traded index fund on Bitcoin in the USA. This is considered a turning point for digital assets. Ophelia Snyder, co-founder of 21Shares, explains in an interview with finews.ch how this decision will contribute to the democratization of markets.
Ophelia Snyder, repeatedly, 21Shares and Ark Invest have encountered rejection in their applications for a Bitcoin-Spot ETF in the United States. How did you personally respond to the approval by the US Securities and Exchange Commission (SEC)?
I am thrilled. We have been discussing this possibility since we started 21Shares 5 years ago and it is the culmination of 2 years of continuous work by our teams. I could not be prouder of what our product development, product operations and legal teams have been able to accomplish here. When we filed in April, this was a contrarian bet. This was nearly 3 months prior to any other issuer filing their application. No one thought this would happen. Today we are able to say that that decision resulted in an approval.
How do you perceive the significance of this development for the future of cryptocurrencies and digital assets?
As we witness greater integration of digital assets into mainstream financial systems, it is clear that cryptocurrencies are becoming a key player in reshaping the future of finance.
«As a market matures, it tends to experience lower volatility and increased stability»
This is a pivotal moment underscoring the growing importance of digital assets in the global financial landscape. This development not only validates the increasing adoption of cryptocurrencies, but also signifies a maturation of the industry, providing more efficient and inclusive financial solutions.
This development is a reminder of the dynamic nature of the crypto market, and we remain dedicated to navigating these changes strategically. We are excited about the possibilities this holds for the future and are committed to contributing to the ongoing evolution of the digital asset ecosystem.
What impact might the introduction of multiple Bitcoin-Spot ETFs have on the price stability and volatility of Bitcoin?
Regarding increased liquidity, the creation of Bitcoin-Spot ETFs could attract more institutional and retail investors to the market. For market integration, ETFs are traded on traditional stock exchanges, which could integrate Bitcoin further into mainstream financial markets. Concerning regulatory impact, if regulatory clarity and approval for Bitcoin ETFs improve, it may attract more conservative investors, potentially stabilizing the market. And then there is the market maturity...
Namely?
The introduction of multiple Bitcoin-Spot ETFs may signal a maturing market. Generally, as a market matures, it tends to experience lower volatility and increased stability. However, this process can take time, and short-term fluctuations may still occur during the transition.
How do you assess the current and future investor interest in these ETFs?
We would expect this to be a combination of individuals who do not want to set up separate infrastructure to access crypto and a large number of institutions who are unable to do so today.
«We are not looking to maximize profitability with the ETF»
The institutions need a combination of things (trading, custody, compliance, risk management, reporting and tax) in order to enter the space. That’s a lot of infrastructure to set up for a single investment. The ETF removes the need for this by essentially outsourcing it to the ETF sponsor. This is very similar to the dynamic we have seen in our EU products.
How is 21Shares preparing for the increased competitive pressure from major Wall Street firms like Blackrock, Fidelity, and Invesco?
With track records dating back to 2018 and 2015, respectively, 21Shares and ARK Invest have guided a wide array of global clients through multiple crypto market cycles with the resilience, adaptability, and foresight required to succeed. Both firms have demonstrated operational and investment excellence with proven client support, setting the gold standard for reliability and performance in the dynamic world of digital asset investing.
This collaboration aims to set a new precedent for innovation and transparency by leveraging our combined research, investment capabilities, operational excellence, and best in class client services.
Concretely, in which areas does 21Shares see its greatest strengths or unique features compared to these major Wall Street firms?
We are the only firm who is bringing a 5 year operational track record for spot crypto products and 10 years of crypto related research. This expertise will show in how we are able to support our clients.
Won't the fact that more than ten financial companies aim to launch a Bitcoin-Spot ETF in the USA exert pressure on ETF margins?
We are not looking to maximize profitability with the ETF; we'll do that more so with our actively managed ETFs. this is an important moment with giving people access/democratization. This is a public good; the equivalent of a financial super highway; we just wanted to make sure that one of the things we communicated was investors felt like they could access this.
How will the approval of the first Bitcoin-Spot ETF in the USA influence the strategic direction of 21Shares?
It does not. We remain committed to both our US and European business.
«We fully expect to continue to expand our presence in the Swiss and in the European market»
We are the largest issuer of crypto-linked physically backed ETPs with more than 40 products. We will continue to expand that offering, as well as our geographic footprint, to serve clients on a global basis.
Meaning?
Yes, we are just getting started in the US but have been in the space, servicing global clients, for five years, so there is a track record of operational excellence and client servicing. We fully expect to continue to expand our presence in the Swiss and in the European markets along.
How does your company interact with regulatory authorities to promote understanding and acceptance of crypto products?
We have worked very closely with our regulatory partners, providing them all necessary documents, insights, and information to help generate greater understanding and awareness about the benefits of this structured crypto offering, and the inner workings of cryptocurrency. We have taken this approach in multiple jurisdictions around the world and look forward to continuing that work well beyond the approval of a single crypto ETF in the US market.
Ophelia Synder founded 21Shares together with Hany Rashwan in 2018 in Zurich. She is part of the "30 under 30" list of the US magazine «Forbes» and was named a «Winning Woman» by the consulting firm EY. Prior to founding 21Shares, she worked for Evercore, UBS and Westly Group. She obtained her bachelor's degree from Stanford University and an MBA from New York University.
(Collaboration: Jule Woermann and Thomas Pentsy)
