This interview was originally prepared and conducted by ETF Central and is reprinted here with permission.
For this edition of Ask the Manager, we sit down with Federico Brokate, Global Head of Business Development at 21Shares, one of the industry’s leading innovators in digital-asset ETFs. Drawing on his experience shaping strategic initiatives at BlackRock’s iShares franchise — where he helped launch their Bitcoin ETF — Brokate now leads 21Shares’ U.S. expansion, focused on delivering greater access, convenience, and product quality for crypto investors. In our conversation, he shares his perspective on the latest market dynamics, evolving investor preferences, and what’s next for crypto product innovation in the United States.
What macro factors have driven the recent crypto market pullback, and what’s your outlook?
The recent pullback isn’t about weakening fundamentals — the long-term thesis for Bitcoin and crypto remains intact. What we’re seeing is largely a macro-driven reset. Renewed tariff uncertainties, questions around stretched AI valuations, and a sharp shift in rate-cut expectations have pushed investors into a more cautious, risk-off stance. Liquidity has also tightened meaningfully as the U.S. Treasury rebuilt its cash balances, which disproportionately affects liquidity-sensitive assets like crypto.
Add in some profit-taking after BTC and ETH hit all-time highs, and you get a sharper move lower in a thin-liquidity environment. Historically, these 30–35% drawdowns are normala for Bitcoin and tend to resolve within a few months absent a major macro shock. With fundamentals still strong, regulatory momentum building, and U.S. ETF flows broadening participation, we view this period as a likely local bottom and remain constructive on the outlook.
What is your outlook on product innovation in the U.S.?
2025 has been a real turning point for regulatory clarity. With the GENIUS Act, updated ETF listing standards, and ongoing progress on the CLARITY Act, the U.S. now has a more stable foundation for long-term product development. This is paving the way for a far broader set of crypto ETPs — similar to what we already see in Europe — including diversified baskets, thematic exposures, and more nuanced index solutions.
As new investor segments enter the market with different constraints around fees, liquidity, taxes, and diversification, we expect issuers to build products that are increasingly targeted to how specific allocators invest. In short, the U.S. market is on the verge of a much more sophisticated and diverse product landscape.
What does the launch of TTOP and TXBC signal about investor demand?
A major trend we’re seeing is that most investors — even sophisticated ones — don’t want to analyze every individual token. They’re looking for clean, all-in-one exposure that captures the broader crypto ecosystem in a single allocation. The strong early interest in TTOP and TXBC shows that demand is shifting toward diversified, rules-based products that simplify the experience.
These ETFs consolidate the research, custody, and operational work into one ticker, making them natural entry points for advisors and portfolio allocators. It’s another sign that crypto is increasingly being treated as an asset class rather than a collection of one-off tokens.
How might products like TTOP and TXBC enhance accessibility and adoption?
TTOP and TXBC track the top 10 crypto assets and rebalance quarterly, giving investors a familiar index-like approach under the trusted ’40-Act structure. That means no K-1s, no special tax filings, and full compatibility with the platforms investors and advisors already use.
They remove the operational hurdles — wallets, private keys, individual token decisions — and package the most established projects into a single ETF. For new investors especially, that dramatically lowers the barrier to adding crypto to a diversified portfolio.
How has investor interest in index products differed from single-asset products?
Index products have broad appeal because they give exposure to the entire asset class without requiring deep token-level knowledge. For advisors and institutions, they fit more naturally into portfolio construction and can be sized within a risk framework just like equity indices.
Single-asset ETFs still matter — particularly for tactical allocation or high-conviction views — but diversified index ETFs are increasingly becoming the starting point for investors building long-term, strategic crypto exposure.
What makes the ’40-Act structure unique and beneficial for TTOP and TXBC?
Most U.S. crypto baskets are still launched under the ’33 Act, which limits their ability to rebalance and often introduces K-1 tax filings. By using the ’40-Act structure, these funds operate under the same regulatory framework investors already trust for traditional ETFs.
The structure removes K-1s, incorporates well-established investor protections, and allows for quarterly rebalancing so the portfolio stays aligned with market leadership. That makes it significantly easier for advisors to integrate these ETFs into existing models and workflows.
How do you expect the top 10 crypto assets to shift in the coming years?
Crypto evolves faster than most asset classes, and outside of anchor assets like Bitcoin, we expect meaningful turnover among the top 10. New projects gain relevance quickly as technologies mature and new use cases emerge.
This is exactly why index-based approaches work well in crypto: investors don’t need to guess which assets will break into the top tier. The index adjusts as leadership changes, capturing emerging winners as they gain traction.
What are the key risks for these funds, and how does 21Shares mitigate them?
Crypto remains volatile and sensitive to liquidity conditions. Individual tokens can face regulatory shifts, technological challenges, or periods of reduced liquidity, and in fast-moving markets a small number of constituents can drive much of the performance.
We mitigate these risks through the ’40-Act framework, FTSE Russell’s transparent eligibility screens, and a rules-based index methodology with quarterly rebalancing. This provides diversification, oversight, and a disciplined approach to portfolio construction — all within the operational simplicity of a traditional ETF wrapper.
About Federico Brokate
Federico Brokate is Global Head of Business Development at 21shares, where his responsibility is to drive business development globally while maintaining a strong focus on U.S. market expansion. Before joining 21shares, he was Director of Americas iShares Business Strategy at BlackRock, where he developed and executed growth strategies for more than 400 products serving over 30 million global clients.
MarketScreener did not participate in the preparation of this interview. Surperformance SAS assumes no responsibility for its content, which was prepared under the sole authority and responsibility of ETF Central.
