XRP News Update: Institutional Dominance Drives CoinShares to Adjust Its Crypto Approach
- CoinShares abandoned U.S. XRP/Solana/LTC ETF plans due to a crowded market dominated by institutional giants like BlackRock and Fidelity. - The firm will pivot to high-margin thematic crypto products and active strategies, exiting leveraged Bitcoin futures ETF BTFX . - Institutional dominance in crypto ETFs now exceeds 90% of inflows, with BlackRock's IBIT controlling $70B+ in assets and 3% of Bitcoin's supply. - XRP ETFs saw $179.6M inflows this week, but CoinShares cited "low margins and slow growth" c
CoinShares Shifts Strategy Amid Fierce ETF Competition
CoinShares, a major digital asset manager overseeing $10 billion in assets, has unexpectedly decided to halt its plans to introduce U.S.-based exchange-traded funds (ETFs) for XRP, Solana, and Litecoin. The company attributed this move to an increasingly saturated market, where large institutional players dominate the landscape.
This change in direction, revealed in a filing with the Securities and Exchange Commission (SEC) on November 28, represents a significant strategic adjustment. CoinShares is now turning its attention to products with higher profit margins, as the competition from established financial institutions intensifies.
Smaller crypto firms in the U.S. are facing mounting obstacles, with giants like BlackRock, Fidelity, and Bitwise now accounting for more than 90% of all crypto ETF investments. CEO Jean-Marie Mognetti explained that CoinShares is realigning its approach in response to the overwhelming presence of these major players, which makes it difficult for smaller companies to compete effectively. The dominance of spot Bitcoin ETFs, particularly BlackRock’s IBIT, has become a primary revenue driver, generating $245 million in yearly fees and approaching $100 billion in managed assets.
This withdrawal is part of a broader trend toward consolidation in the crypto ETF sector. Even though investor interest in XRP and Solana funds remains strong—XRP ETFs alone attracted $179.6 million in new investments this week—CoinShares determined that competing with entrenched firms would likely result in thin profit margins and slow expansion. In addition to canceling its ETF launches, the company is also discontinuing its leveraged Bitcoin futures ETF, BTFX, and reallocating resources to thematic crypto baskets and actively managed strategies. Mognetti described these as innovative offerings that provide greater opportunities for differentiation.
The company’s decision comes as the crypto derivatives and ETF markets continue to evolve. For example, CME Group recently announced it will introduce spot-quoted futures for XRP and Solana on December 15, aiming to meet institutional demand for regulated trading products. These new contracts, which are based on real-time spot prices and require lower margin commitments, highlight the growing interest among institutional investors in alternative cryptocurrencies. In fact, XRP and Solana ETFs have collectively drawn over $300 million in new investments this month.
The challenges facing CoinShares also illustrate the growing influence of traditional finance in the crypto space. BlackRock’s IBIT has become the fastest ETF ever to reach $70 billion in assets and now controls more than 3% of all Bitcoin in circulation, further cementing its market leadership. Despite these hurdles, smaller issuers are still finding ways to compete. Recent weeks have seen XRP ETF inflows surpass those of Solana, fueled by aggressive fee reductions from providers like Grayscale and Franklin Templeton, who have temporarily lowered costs to just 0.19% for institutional clients.
CoinShares’ new direction reflects a wider industry transformation. While the company remains committed to the U.S. market, it is now prioritizing innovative, actively managed, and thematic investment strategies over single-asset ETFs. According to company filings, Mognetti believes this approach will help CoinShares deliver lasting value to shareholders in an environment where innovation is challenging for newcomers.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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