The Wolf Of All Streets - Is Bitcoin's Institutional Adoption Actually A Lie?

Episode Date: July 4, 2026

Their research helped the SEC approve the Bitcoin ETFs. Their dashboards helped expose the FTX collapse before anyone else knew what was happening. In this interview, Adrian Fritz and Eli Ndinga from 21Shares break down why institutional allocation to crypto is still practically zero despite all the headlines, how they decide which products to bring to market before the narrative even exists, and why the old altcoin seasons where everything pumps together are never coming back. They explain how blockchains are about to become invisible infrastructure that your mother uses without knowing it, where the next mini bubbles will form in privacy and AI, and why 99% of crypto assets won't exist in a few years — but the 1% that survive will be the Googles and Facebooks of the next era. Learn more about your ad choices. Visit megaphone.fm/adchoices

Their research helped the SEC approve the Bitcoin ETFs. Their dashboards helped expose the FTX collapse before anyone else knew what was happening. They were the first company on Earth to launch a physically backed Bitcoin ETP, and they now manage nearly $5 billion in assets. Today, Adrian and Ellie from 21 shares break down where the real money is headed. Liquidity will come back, but much more selective. Will we see some rallies? Absolutely. Maybe in certain sub-industrial. certain sub-industries, subcategories.

It is going to be about collective investment, fundamental investment in crypto. We may see capital trying to find the next one, the next Zcash, the next hyperliquid, the next AI platforms. Why the old Al-coin seasons are never coming back. The altcoin seasons in the past have mainly been liquidity events. It was very easy to make money in crypto. You were just throwing in capital and everything went up. But it wasn't really based on any fundamentals.

the alt-coin seasons, like we know from the golden times, I would almost say they're not coming back. And why AI agents and invisible blockchains are about to change everything. Let's go. I guess we should start from the beginning so that everybody knows who you are. Ellie, we'll start with you. And then Adrian, you know, maybe talk about your roles and just a very brief background and how you got here.

Yeah, sounds good. Thanks for having us. I'm the founding team member of 21 shares and global head of research. joined the company nearly six years ago to be out of the research department from scratch, background in venture capital to invest in fintech and crypto companies, and I've been in the space for the last 12 years. You're out. All right, my name is Adrian.

I'm the chief investment strategist at 21 shares. Yeah, I help shaping the narrative when it comes to digital assets for our firm. And I strongly support the sales team around the globe, making sure, yeah, we translate those complex topics into digestible bits. That's what we try to do here. It's very challenging. That's the point of this show. So maybe you can give a bit of history of 21 shares, because you guys are really the OGs in what has now become a very popular narrative in space in crypto, but definitely was not when you started, I believe, in 2018, right?

I mean, now everybody talks about ETFs and everything happening in the space, but you were very early. Indeed, for sure. But 21 shares was built for the mothers or the co-founders, Henny and Ophelia, to ensure that they can have easy access to Bitcoin and inferior and the long-tale assets in an easy way, as easy as buying a stock like the SMP 500 or an EPD stock. They started in Europe in Switzerland,

and then they expanded into several markets, including the U.S., Latin America, Middle East, et cetera. But the whole goal at that time was, how do we provide easy access to Bitcoin and crypto in the same way you would basically open a brokerage in a bank account to invest in the stock market or commodities or any of alternative assets? And then we went on to build this juggernaut

that manages today nearly $7 billion in assets on the management. Crazy. Anything to add there on that, Adrian? Yeah, I mean, I think it's worth highlighting that we were the first issue globally that launched a physically backed Bitcoin ETP. We were the first to market. Of course, we are a Swiss company born in race in Switzerland. But ever since where we established our presence in Europe, we've been expanding around the globe.

And obviously, the US became quite an important strategic market for us as well since the launch of the ETFs over there. And I think we've all been sort of watching with bated breath as the institutional conversation has evolved. I mean, when you started, it was institutions are coming. Right now, I think institutions are here and what are they doing? So, I mean, let's just zoom in on maybe the past year. How would you say that the institutional conversation around digital assets has changed? Go for it. I would say it's easier to get a meeting in the first place and also just how they perceive

the topic changed completely. While I would say five years ago, it took a lot for them to even have that conversation because, as you know, there's been a lot of misconceptions when it comes to digital assets, to crypto assets. And it takes many meetings until they truly understand or start even being interested in the topic itself. So I would say what changed over the last year, given all the institutional adoption and the regulatory tailwinds is that it's much easier, yeah, in those meetings to make

that case for crypto assets within a portfolio. It doesn't say it comes, there are no hurdles anymore, but at least I would say we got that stamp of approval that this asset class is here to stay. And I think it's quite refreshing because it's been quite an uphill battle over the last five, six years. Eli, I mean, do you think that now almost all traditional players are considering a crypto or Bitcoin strategy and, you know, what's kind of driving that shift? I'm assuming it's sort of what Adrian laid out. No, for sure.

And I couldn't agree more. And I think the regulatory landscape also changed a lot over the last five years, but most importantly over the last couple of years within your administration in the U.S., but also in Europe with Mika. Yeah, but I would say, though, is that the mindset around the allocation is also mostly different. In the way that investors see the asset class in multiple brackets rather than just one basket that falls into Bitcoin FM and the long-tale assets, they really diversify and differentiate them very strategically to the point that you have, you know, high growth businesses like the FAM, the Solana, and the high particular of the world. And then you've got the emerging store value in Bitcoin, and they understand that really grossly and really well.

And I think it comes down to education, comes down to providing the right analogies to help them invest in this asset class. And I would say most importantly what the investors care about is also based on their risk profiles and their customer type, right? So advisors are going to think about the asset class very differently. They want to look smart. They want to understand what's next. And that's why education here is about empowering them and holding.

them while family offices and private banks would be more more tactical and strategic as well. So Adrian, looking at that evolution of how institutions have behaved, how would you say that institutions but individuals now are viewing the role of digital assets in their portfolio, right? Are they thinking of it as a 1% allocation, a 5% allocation? Do you have people that are going all in? I guess I'm just trying to get a feel on the pulse of, you know, how people are putting this into their greater strategy? I would say there's no one fits at all, but I would say it's becoming more and more consensus that an allocation between one till five percent when it comes to Bitcoin

makes sense for the overall portfolio. And I think what they understand is just given the different return drivers and also the characteristics of something like Bitcoin, that even a small allocation, depending on how the portfolio looks like can increase the overall risk-adjusted returns. So, of course, it took a while until they understood that this is not a Ponzi scheme. Then it took a while for them to understand the, yeah, just a value proposition of Bitcoin, while now we're in the face of, okay, how do I size my position and how do I allocate correctly? Yeah, that makes perfect sense.

If you had to guess, I mean, what percentage roughly do you think of people? even are holding the asset or started to allocate. I mean, we're seeing a lot of people talk about doing it. I just have no feel for how many people have actually done it. I would say, I know we've been saying the institutional adoption is happening. And I think it is, but it just takes much longer than people anticipated. It's a journey, not a destination. What I mean by that, I would say the allocation is still below 1%, maybe even

close to 0% because what we've seen so far is a lot on execution only basis, meaning a lot of clients they now have through the ETFs the possibility to add Bitcoin to their portfolios. But when it comes to the discretionary part, I think we're still close to zero and we're still at the early, early innings when it comes to that for strategic allocations. Yeah, that makes sense. And just sort of pivoting, Ellie, I want to talk to you about the research angle, which I know you're leading that effort. I read your guys research all the time.

I think that it's industry leading, obviously. So I guess what does crypto research mean in practice? You know, like how do you decide what to provide to people and how do you decide how to actually come up with that research? And how is that different from you? Because I would imagine that the way you present your research is a huge edge for you competitors. Yeah, thank you for that.

Thank you for the kind of words. The way we are approaching research is really based on the investor types and their journey in crypto. Investor type by their risk profiles and also where they seat in the overall asset management space. So, for example, if you talk to a hedge fund or a family office, the language is going to be widely different, while the fundamental questions could be still the same when it comes to how do we value capital assets, investing capital assets in a portfolio, what are the next

trends in the asset class, why they would be excited about the next hyperliquid or the next FAM and Bitcoin and Solana. So we are designing our research when it comes to basically first principles and how investors can understand better the asset class with the right analogies and where they are using the analogies that really relates to them in their specific sleeve. And then we really expand to essentially the asset classes that they may be interested in, even though we don't have yet products in. We still want to really educate them on the different trends that we see in the markets.

And then the last thing that 21 shares does really well is building real-time analytics. There is no Bloomberg of crypto right now, which is really difficult to build investment fees and understand what's next. And what we've done really well is to build these real-time dashboards on doing analytics publicly. so that we can get these constant feedback from regulators and investors around the world so that we can better understand what's next. And what we've done really well is to make sure that beyond just the underlying products, we really tried to also discuss about the market structure. So our research really helped, for example, the SEC to be educated on the Bitcoin market structure

that basically led them to understand the correlation between the futures market and the spot market to approve these Bitcoin ETFs back in 2024. But we also help with our dashboards to unveil the FTX collapse at that time back in 2022. We were able to identify the addresses of FTX and Amidia as well that basically led CoinDesk to and they all the whole story thanks to our dashboards to some extent. So this is where we basically stand in our research. So for instance principles, what's next and how these customize the research for the different investor profiles. So it's interesting because it, correct me if I'm wrong.

It seems like there's sort of two directions for the research. One is that you're presenting research to all of these different entities. But the other, I would imagine, is you're gathering research to decide what kind of products to release, you know, how you evaluate the space. So those product decisions, how to build your own business, right? So how, I guess, how does the research feed all of that? Yeah, for sure. The way we are thinking about, and we cannot reveal the whole secret sauce, but the way we're thinking about essentially launching new products

is really based on the regulatory environments and whether there is basically the right rails for the investors to be able to access a specific product. You may not know, but in Europe is actually quite fragmented. Different markets or having different local jurisdictions to approve these kind of products based on the volumes, the liquidity, the time to market, the track record, etc. So where research really stands out is about looking at the fundamentals and the technology behind it and the team behind it.

The same way you would evaluate essentially a startup or even an early stage company. You would basically be having these robust due diligence processes to better understand who is the team, the criminal backgrounds and stuff like that. But what really matters for us is to make sure that there is customer appetite for these kind of products. So we really want to make sure that we build things that people may want in the future. Sometimes it's not always the case. And that's why we launch products before market acceptance across the board. Actually, we're known to launch welfare products at 21 shares as pioneers, whether it's for staking, whether it's for long-tale assets or even baskets.

So that's why for us is really important to make sure that we match both the fundamentals, the future trends, as well as the market demand for these kind of products. Yeah, he kind of gave me a nice segue, Adrian, because I wanted to ask next about the regulatory and institutional landscape because it seems like, yes, we have, I think, a maturing regulatory situation, but it's extremely fragmented all over the place. So how is that changing the conversation for you? I mean, maybe actually we should start with how do you even manage every other, every jurisdiction? I mean, the United States, right, you can get federal approval for something, but then you have to go state by state. And as kind of, you know, Ellie alluded to in Europe, you have no country by country, even though. and then you have the whole world and everybody has a different regime.

So I guess first, how do you navigate that? And then I guess we could talk about how that changes the conversation as it's happening. I think, number one, you need a top-notch legal team that can navigate through that landscape. But other than that, I would say the beauty of ETPs and ETFs is obviously that these always been regulated traditional vehicles. And therefore, over the years, most of the time. the same rules apply compared to traditional assets. Of course, there are some nuances to it, like the different exchanges, they need to, yeah,

approve the underlying, or we got to deal with the different financial regulators. But I would say the beauty, and that's why we've been in the market for so long, is really that we're dealing with traditional financial products, and that makes it much, much easier. I would say the regulatory fragmentation really has an impact on the underlying itself. So I would totally agree with you. It's still very much fragmented, but we've seen a lot of progress over the last couple of years. And I think that would just strengthen the case for the underlying. And therefore, if you choose to invest in one of those, we obviously provide the necessary access. And what's beautiful as well, I would say, Scott, is that regulators want to engage as well,

which is widely different from, you know, five years ago, six years ago when usually they were basically staying away from discussing about approving these kind of products in the market. So I do think that the need for education, even from regulators, is at an all-time high, which is, I think, quite fruitful for especially issuers like ourselves and making sure that we can actually also lobby for approving certain products that are not yet applicable in certain jurisdictions, which has been so far actually quite fruitful over the past few years, especially a couple of years since the launch of the USATFs in the US. Yeah, I mean, it feels like, as you sort of alluded to, because you have this wrapper,

you're able to move actually, even as slow as things move, you're able to move a lot faster than most. Yep, exactly. Absolutely. Yeah, that makes sense. And how does macro complexity, all this regulatory uncertainty, all these things shape institutional thinking, I guess, on digital assets? Because you have to worry about creating all the products and going regulator to regulator jurisdiction and jurisdiction. But you also have, I would imagine, a different kind of investor in all those places who want access and need an education as well. So, I mean, how do you navigate that?

Every day. Go for it, Adrian. Yeah, I mean, once again, I think you're 100% right. There's a lot of factors to take into account. And having that macro conversation is obviously really, really important because it dictates everything from top down. And that's really where we come in. Of course, when we speak to allocators or CIOs, most of them have a good understanding of the current macro landscape. but I think what's really important or where they need help and support

is really translating that into the digital asset space. So I think that's where we're not only with our products, but also with our research, support and build that bridge to help them, okay, understand what the different market drivers and how they have, what kind of impact they currently have on the digital asset space. Yeah, that makes perfect. sense. I mean, so let's talk brass tax, right? This is all theoretical, all great. You actually

have to make decisions on how to bring things to market and what to bring to market, right? So you've got 60, I believe, plus already. What's the philosophy behind expanding the lineup and how do you choose what comes next? I think it's pretty simple. And I think, you know, Paul Graham, the founder of White Competenter, does it really well. And it says it's really well. We have to build products that customers may want in the future, right? So it's either option one, they already want the product or option two, they may want to have the product in their portfolio in the future. They don't know yet, and that's why we actually have to have a forward-looking view on the market and launching world-first products. Oftentimes, because, you know, the asset class is adopted by, I think,

less than 700 million people around the world. We are 4 billion people on the Internet, 7 billion people on this earth, crypto is probably less than 5% of people's problems in attention. So what we do is making sure that we create our strategy around what people want now or what they may want in the future. And usually what they may want in the future is not really a gamble when we look at the fundamentals, like the revenue growth, the user adoption, the developer adoption of certain protocols. It's actually pretty easy to create that equation so that it's a positive,

game when it comes to launching these products and oftentimes we have multiple om runs when it comes to that and of course launching the world first Bitcoin product back in 2019 was a revolution at the time and also even in the first basket as well in 2018 but at the same time looking backwards we knew that people were willing to have exposure to these frontier technology and we truly believe that actually crypto is falling under the same sleeve around AI as well as robotics when it comes to these disruptive technologies that people are going to be using on a daily basis. So for us, we're really paying attention a lot to the fundamentals.

And oftentimes, customers may not want them at the moment, but we know that in the future, the trend and the narrative may kick in once the fundamentals are getting closer to the price movements. And we've seen that we have several narratives around privacy and AI, as well as, of course, financial services like hyper-liquid. We have a long history in this industry of moving fast and breaking things. So I would imagine from your perspective being a serious player, obviously, you have to balance speed and being first with these new themes with your research discipline and making sure that it's the product you actually want to bring to market, right? No, absolutely, definitely.

And because we are working with regulators to launch these products, they are specific requirements to be launching these products, which really helps to make sure that this is what the investors may want in the future. And of course, you know, this asset class, and I like to call it this liquid venture capital market, where essentially you're going to have products that are going to be phenomenally well in the future, while others unfortunately may not catch up to the competition or catch up to the regulatory landscape,

like the dot-com bubble, like the basically internet and highly people over the last 25 years. So I do think that as long as the fundamentals and the customer demands or on the positive sides, usually that's why we are going to be launching these products alongside the regulatory approvals. But of course, it does come with some closures sometimes as well. As we know in crypto and as you said,

sometimes we break things or the fundamentals, they're just not sustainable. Trends and narratives change. And therefore, it does happen and we assess on a recurrent basis all of our products out there. And sometimes it does lead to a closure of certain products, which is very normal in the ETF space, though. So, yeah. So you've had some wildly popular home runs, right? and I think you have been ahead of the market a number of times without speaking in specifics. I mean, now moving forward, what categories and areas are you focused on?

And I guess that being instructed by what you've kind of done in the recent past. Go for it, Adrian. Ely, that's your turf. I know what you want to talk about. Go for it. I got it. I think, Scott, for the last 15 years, the industry has spent billions of dollars to invest in infrastructure, the same way the internet was constructed that way in the early 90s so that we

moved away from basically dialogue to bandwidth with faster and cheaper transactions or even faster internet experience. And I do think that we are in that interesting flexion point right now in crypto where essentially the user experience is moving up the ladder from infrastructure to consumer-facing applications. And that's why you've seen the success of, you know, prediction markets and decentralized exchanges like hyper liquid or putting market, etc.

So we do think that what's next is going to be about blockchains becoming invisible, boring technology, especially for smart contracts platforms where essentially even my own mother, for example, she's using pretty market to follow

the state of the elections, the state of the geopolitical landscape, which is really unprecedented. She's not a traitor, but she's just following the news. So I do think that right now, clearly we're seeing that there is a clear intersection between consumer applications as well as blockchain rails, plus AI as well. I think we've barely scratched the surface around how AI agents are going to be using blockchain rails across the board. Certainly around trading is going to be one of the first and one of the key product market fits alongside payments.

But we're incredibly excited about basically consumer financial services, AI as well. as privacy, which is definitely a key feature around where the state of the world is headed, especially around the AI surveillance threats as well as the quantum threats. You were acquired by Falcon X. They're obviously a beast in the market. I mean, what does that bring to your clients and what was behind that decision? I think we were quite excited about the acquisition. I would say the beauty is that their business model is very complementary.

Obviously, as you said, Falcon X has quite a presence, especially in the US, known for Brian Brokage, trading, credit. While we on the other side, very traditional asset managers providing access via ETPs and ETFs. So it was definitely a very complementary move, meaning that they basically provide the full stack offering when it comes to crypto assets. So for 21 shares, not much has changed, I would say. We're just building synergies together with Falcon X and making sure we leverage capabilities on both sides when it comes to expertise, but also from a geographical standpoint. That answers it perfectly. Eli, I want to ask you a question. Or either of you can answer this.

I'm assuming you get the same kind of questions repetitively from people about crypto generally. We love it, by the way. This is what I hear all the time. Crypto is purely speculative. What's the counterpoint when a serious institution says to you, crypto is purely speculative. I want nothing to do with this. I think speculation, we have to define it first.

I think speculation comes down to volatility. And when we measure the volatility of the asset, it has come down significantly from close to 90% to below 40% for Bitcoin specific. And that's basically how we provide this empirical answer to the investors. And then when it comes to the long-tale assets, we always tell them that, you know, this is the early stage, especially when it comes to the adoption of like consumer applications built on blockchain rails. We only have 5% of the world using crypto.

So basically crypto is where the internet was in 2003 after the dot-com bubble. We had Enron, which is basically our very own FTX, right? back in 2001, and after that came out, Amazon, Google, and then Facebook, et cetera. So we're in this interesting inflection point where essentially crypto is getting adopted for day-to-day users, especially around trading, even following the news, as well as payments. And I do think that all the applications that we take for granted today were the ones that we never thought about in the early 90s, and that's basically where we're headed with crypto specifically. Adrian, how would you answer this question?

My answer, I would say, is a bit more pragmatic. I would tell them, yes, you are right. Right, because there's, of course, a lot of speculation. It's a cutting-edge technology. This is a very young industry, and obviously it drives a lot of speculative investments. I would also say the alt-coin seasons in the past have mainly been liquidity events, We remember, especially during COVID times, it was very easy to make money in crypto. You were just throwing in capital and everything went up.

But it wasn't really based on any fundamentals. So what I would say is that 99% of all crypto assets out there most probably won't exist in a few years. We potentially see a massive consolidation. But I think or we think that shouldn't overshadow. the 1% remaining, and here I agree with Ellie, those will be the Facebooks of the future, the Googles of the future. And you can clearly measure some of that fundamental traction that they're showcasing. And then there's Bitcoin. Obviously, Bitcoin stands out.

Bitcoin is the monetary anchor of this entire asset class. It has a different value proposition, and therefore it should be treated differently within a portfolio as well. while all the rest is more of early liquid venture style investing, which is not necessarily a bad thing, I would say. That's how I frame it entirely every time I have the conversation. There's Bitcoin and there's everything else, and there's nothing wrong with everything else. Just know that it's everything else.

Exactly. On tech and venture capital, that's not what you're doing with Bitcoin. I love that. I'm going to take my note that says, Adrian says, Altseason is dead. Well, I would say we won't see those massive alt-coin seasons like in the past. Everything goes up. No way.

Yeah, I never say never. There might be another kind of like massive injection like we had during COVID, so never say never. However, I believe liquidity will come back, but much more selective. Will we see some rallies? Absolutely. Maybe in certain sub-industries, subcategories. certain assets, hyperliquid is the best example. Absolutely.

But the altcoin seasons, like we know from the golden times, I would almost say they're not coming back. I think they're not coming back. I think to your point, we'll have selective all-coid seasons, which have seen it. Even as in this background down train, there's things that outperform. It's kind of the old joke when people ask, you know,

what when an alt season comes back, like what coin do you want to hold? I'm like, probably something that doesn't exist yet. Some people feel bag holders. That's true. Well said. Well said. Yeah.

It's always a new narrative. I mean, Ellie, before we go, you want to take that one? No, what do you think about all coins coming back? No, I agree. It is going to be about, you know, selective investment, fundamental investment in crypto. We may see some more speculation and bubbles within specific sectors. It's possible, for example, in, let's say, privacy, AI, intersections with crypto, or even like the next hyperliquid, we may see capital

trying to find the next one, the next Zcash, the next hyperliquid, the next, you know, AI platforms. So it's possible that we see some mini bubbles within specific sectors. And I could see that happening. We've seen that as well in multiple markets. And everything is cyclical, right? So I would say that everything going up at once may not happen again. but never say never.

I'll take never say never. Where can the audience, they're listening, obviously, where can they find 21 shares research? Yep, they can find on our website at 21 shares.com. They can also follow us on Twitter as well as LinkedIn at 21 shares and 21 shares US. And of course, we have a newsletter read by over 20,000 people around the world and investors

so they can sign up to it. Love it. Yeah, that's great. Listen, I need to steal my ideas from someone. I appreciate that. I can't be expected to think. It's ridiculous. Gentlemen, thank you so much.

I was really great, incredible insight. Anything I might have missed before I let you go? No, this is great. Nothing else on my side. We really appreciate you for the time. Thanks for having us again. Awesome, Adrian. Anything?

Nothing from my side. Stay tuned and hold through this volatility. I know it's hard. It feels like a deja vu for a lot of those veterans in the market. But we've been there, done that. And crypto is not dead, especially Bitcoin is not dead. Call me crazy, but I prefer buying things that I like for the long term, cheaper. Yep.

Crazy, crazy idea. But I'd much rather buy Bitcoin in the 60s than in the 120s. Absolutely. All right, guys, thank you very much. Deeply appreciate your time. Thank you.