In November 2025, the U. S. digital asset investing landscape reached a significant milestone as 21Shares, a Swiss-based leader in crypto ETPs, unveiled the first-ever '40 Act crypto index ETFs. These new funds - the 21Shares FTSE Crypto 10 Index ETF (TTOP) and the 21Shares FTSE Crypto 10 ex-BTC Index ETF (TXBC) - are reshaping how both professional and retail investors can access a diversified basket of cryptocurrencies, all within a regulatory wrapper familiar to Wall Street.

Visual breakdown of 21Shares TTOP and TXBC crypto index ETFs highlighting top crypto holdings and '40 Act regulatory framework

Understanding '40 Act Crypto ETFs: Why the Regulatory Structure Matters

The term '40 Act refers to the Investment Company Act of 1940, a foundational piece of U. S. financial regulation that governs mutual funds and most traditional ETFs. Until recently, most U. S. -listed crypto ETFs were structured under the Securities Act of 1933 ('33 Act), which lacks some of the investor protections and tax advantages found in '40 Act products.

This distinction is more than just legalese. The '40 Act imposes stricter compliance standards, enhanced governance requirements, and greater transparency for fund operations. For institutional investors and financial advisers accustomed to these safeguards, '40 Act funds are often considered the gold standard for portfolio construction. As Duncan Moir from State Street Global Advisors put it in recent coverage: "There's a difference in the tax treatment, and for professional investors, '40 Act funds are really the gold standard. "

Diversified Exposure: Inside TTOP and TXBC’s Index Methodology

The launch of TTOP and TXBC is especially notable because these ETFs do not just track Bitcoin or Ethereum alone. Instead, they offer broad market exposure through indices designed by FTSE Russell:

  • TTOP (FTSE Crypto 10 Index ETF): Tracks a market cap-weighted basket of the ten largest cryptocurrencies by market value. This includes established names like Ethereum (ETH), Solana (SOL), Dogecoin (DOGE), and others - providing instant diversification across multiple digital assets.
  • TXBC (FTSE Crypto 10 ex-BTC Index ETF): Mirrors TTOP but deliberately excludes Bitcoin from its holdings. This allows investors to target growth opportunities in emerging altcoins while avoiding direct exposure to BTC's dominant price swings.

The result is an accessible way for investors to gain indirect entry into an evolving ecosystem without having to manage wallets or deal with complex custody solutions.

The Institutional Angle: Why Professional Investors Are Taking Notice

The debut of these index ETFs under the '40 Act regime is already drawing attention from wealth managers and institutions previously hesitant about single-asset spot crypto products. The combination of diversified exposure, familiar regulatory oversight, and competitive fees (set at 0.5% for TTOP and 0.65% for TXBC) makes these funds especially attractive compared to previous offerings.

This shift could be transformative: according to industry data cited by 21Shares, U. S. retail investors now represent roughly half of a £130 billion global crypto ETP market - yet this still accounts for only about 1.38% of the total U. S. ETF market. By bridging traditional finance with digital assets through robust structures like those provided by Teucrium Trading (21Shares' partner on these launches), there's potential for substantial growth in adoption among both advisors building model portfolios and institutions seeking compliant ways to access crypto returns.

For those accustomed to the rigors of traditional fund due diligence, the entry of '40 Act crypto ETFs provides a regulatory comfort zone. The funds’ daily liquidity, strict custody protocols, and transparent reporting are all features that institutional allocators demand, and until now, were largely absent from U. S. crypto index products. This is particularly relevant for RIAs and multi-family offices, who can now recommend diversified crypto allocations without stepping outside their compliance frameworks.

It’s also worth noting that the underlying indices, crafted by FTSE Russell, are rebalanced quarterly to reflect shifts in market capitalization and liquidity. This ensures that TTOP and TXBC remain representative of the evolving digital asset landscape, capturing momentum in sectors like DeFi or layer-1 blockchains as they rise in prominence. By excluding Bitcoin in TXBC, 21Shares has created a unique tool for investors seeking pure-play exposure to altcoins without BTC’s outsized influence on returns or volatility.

Implications for Crypto ETF Regulation in 2025: Setting New Standards

The launch of these ETFs under the Investment Company Act is more than just a product milestone, it’s a regulatory signal. As U. S. regulators become more comfortable with digital asset indices wrapped in familiar legal structures, expect other issuers to follow suit. The move could accelerate a shift away from less-protective '33 Act wrappers toward '40 Act ETFs as the default for diversified crypto exposure in the U. S.

This trend also puts pressure on index providers and fund sponsors to maintain high standards for asset selection, liquidity management, and operational transparency. The bar has been raised: investors will increasingly demand comprehensive risk disclosures and robust governance alongside their crypto returns.

What Does This Mean for U. S. Investors? Broader Access, With Guardrails

Perhaps most importantly, 21Shares’ TTOP and TXBC ETFs open new doors for everyday investors who want broad-based crypto exposure but lack the resources or expertise to manage direct holdings safely. With competitive fees (0.5% for TTOP; 0.65% for TXBC) and simple brokerage access, these funds lower barriers while embedding investor protections previously missing from much of the U. S. digital asset market.

For those building diversified portfolios, or simply looking to capture upside from emerging blockchain projects, these ETFs offer a practical solution with familiar tax reporting and oversight standards.

Understanding 21Shares’ '40 Act Crypto Index ETFs: Key Questions Answered

What is a '40 Act crypto ETF and how does it differ from previous crypto funds?▲
A '40 Act crypto ETF is an exchange-traded fund structured under the Investment Company Act of 1940, which provides stricter regulatory oversight, enhanced investor protections, and tax advantages compared to ETFs issued under the Securities Act of 1933. This framework is widely regarded as the gold standard for investment products in the U.S., making these ETFs more attractive to financial advisers and institutional investors who prioritize compliance and governance.
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What are the main holdings of the 21Shares TTOP and TXBC ETFs?▲
The 21Shares FTSE Crypto 10 Index ETF (TTOP) tracks a market cap-weighted index of the top ten largest cryptocurrencies, including assets like Ethereum, Solana, and Dogecoin. The TXBC ETF offers similar diversified exposure but specifically excludes Bitcoin, focusing on leading cryptocurrencies outside of Bitcoin. This structure allows investors to tailor their exposure to the broader crypto market or to non-Bitcoin assets.
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What are the risks associated with investing in '40 Act crypto ETFs like TTOP and TXBC?▲
While '40 Act crypto ETFs offer enhanced regulatory protections, they are still subject to the volatility and risks inherent in the cryptocurrency market. These include price swings, regulatory changes, and potential security vulnerabilities of underlying assets. Additionally, because these ETFs track a basket of cryptocurrencies, a significant event affecting a major holding could impact overall performance. Investors should carefully consider their risk tolerance before investing.
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How do the fees for TTOP and TXBC compare to other crypto ETFs?▲
The fees for the 21Shares ETFs are set at 0.5% for TTOP and 0.65% for TXBC. These fees are competitive with other crypto ETFs, especially considering the enhanced regulatory framework and diversified exposure they offer. Lower fees can help investors retain more of their returns over time, making these products appealing to cost-conscious investors seeking regulated crypto exposure.
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Why are '40 Act ETFs considered attractive to professional investors and financial advisers?▲
'40 Act ETFs are often favored by professionals because they adhere to stricter compliance, governance, and reporting standards. This regulatory rigor provides greater transparency and investor protection, making them suitable for institutional portfolios and financial advisers who must meet fiduciary responsibilities. The familiar structure also simplifies due diligence and integration into traditional investment strategies.
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The arrival of '40 Act-regulated digital asset index funds signals a new era of maturity for U. S. crypto investing, one where innovation meets accountability.

To explore deeper analysis on how these products are reshaping digital asset investing this year, visit our full guide at How 21Shares’ ’40 Act Crypto Index ETFs Are Changing Digital Asset Investing in 2025.