CoinShares To Acquire Bastion For Active Crypto ETFs In US

European crypto asset manager CoinShares is set to make another strategic acquisition as the company prepares to go public in the United States.

CoinShares announced Wednesday that it will acquire London-based crypto investment manager Bastion Asset Management as part of its strategy to expand crypto investment products in the US.

The deal, pending approval from the UK Financial Conduct Authority, will see CoinShares fully integrate Bastion’s trading capabilities, strategies and team into its platform. The terms of the deal were not disclosed.

“By combining Bastion’s systematic trading expertise with our 1940 Act registration, we can develop actively managed products for the US market that go beyond simple directional exposure to cryptocurrencies,” a CoinShares spokesperson told Cointelegraph.

Active ETFs vs passive ETFs

Unlike a passive exchange-traded fund (ETF) that tracks an index or asset, an active ETF relies on its managers to select investments in an attempt to outperform the market.

“Most crypto asset managers in the US focus exclusively on passive products that simply track cryptocurrency prices,” the CoinShares spokesperson said, highlighting the growing institutional demand for more sophisticated investment solutions.

As CoinShares holds registered investment adviser status under the US Investment Company Act of 1940, the company is permitted to offer actively managed investment products in the US, including sophisticated strategies such as actively managed ETFs.

However, creating these products requires deep quantitative expertise and proven systematic trading capabilities, which CoinShares expects to obtain from Bastion.

Related: What a shortcut for ETF approvals could mean for crypto

“Bastion’s team has over 17 years of experience developing systematic, alpha-generating strategies at leading hedge funds including BlueCrest Capital, Systematica Investments, Rokos Capital, and GAM Systematic,” CoinShares told Cointelegraph, adding:

“Their quantitative approach, using academically-backed signals to generate returns independent of market direction, is precisely the type of sophisticated, actively managed strategy that differentiates managers in competitive markets.”

The rise of active ETFs

Despite the crypto ETF market surging, the industry is heavily dominated by passive ETFs, such as spot Bitcoin (BTC) and Ether (ETH) funds, echoing the dominance of passive funds in traditional finance.

That trend began to change in July, when the number of active crypto ETFs overtook index-tracking funds, more than doubling in the past five years and signaling a shift in market dynamics.

“CoinShares will offer both directional products and strategies designed to generate alpha regardless of market conditions,” the spokesperson said.

CoinShares’ US push

CoinShares’ investment product expansion in the US marks an ongoing market push, with the company planning a public US listing through a special purpose acquisition company at a $1.2 billion pre-money equity valuation.

“This listing on a US exchange will provide us with deeper access to US capital markets and significantly enhance our visibility with American institutional investors,” CoinShares told Cointelegraph, adding:

“The US remains the world’s deepest capital market for digital assets, and we’re building the infrastructure, team, and product suite to become a leading institutional player in that market.”

The news came soon after the US Securities and Exchange Commission approved proposed rule changes that enable securities exchanges to adopt generic listing standards for new crypto funds, facilitating faster ETF approvals.

According to online reports, the new process will cut the maximum time from filing to launch to 75 days from 240 days.