The crypto fund sector continued its expansion this week as market maker GSR launched its first exchange-traded fund tracking Bitcoin, Ethereum and Solana, while UK investors gained access to a tax-free route into crypto through a new partnership offering 21Shares exchange-traded notes.
GSR Enters the ETF Arena
GSR, one of the cryptocurrency market's prominent market-making firms, has entered the exchange-traded fund space with the launch of Core3, its first crypto ETF. The fund is actively managed and tracks a multi-asset basket covering the three largest proof-of-stake and proof-of-work digital assets: Bitcoin, Ethereum, and Solana.
According to reporting by The Block, Core3 represents GSR's first foray into retail-accessible fund products, marking a significant strategic pivot for a firm traditionally focused on institutional liquidity provision. The launch comes during a period of broader expansion both for GSR and for the wider crypto fund sector, which has seen increased regulatory clarity and investor interest following the approval of spot Bitcoin and Ethereum ETFs in the United States.
The actively managed structure of Core3 distinguishes it from passive index-tracking funds, suggesting GSR intends to leverage its market expertise to dynamically adjust allocations among the three assets rather than simply mirror their market-cap weightings.
UK Investors Eye Tax-Free Crypto Exposure
Across the Atlantic, UK-based investment platform Stratiphy has announced it will offer clients access to three exchange-traded notes (ETNs) provided by 21Shares, giving British investors a structured and potentially tax-efficient route into digital assets. The products cover Bitcoin, Ether, and a combined BTC-and-gold instrument.
CoinDesk reports that the arrangement revives a tax-advantaged approach to crypto investing for UK retail participants, who have faced a complex regulatory and tax landscape around digital asset holdings. ETNs held within eligible UK investment wrappers can, under certain structures, shield gains from capital gains tax obligations — a meaningful consideration given HMRC's historically strict treatment of crypto profits.
The inclusion of a Bitcoin-and-gold combination product reflects growing interest in blended safe-haven strategies, positioning crypto alongside traditional store-of-value assets for risk-conscious investors.
A Broader Trend
Taken together, the two announcements reflect a maturing market where regulated, professionally managed crypto products are increasingly accessible to both institutional and retail investors. The convergence of active management strategies, multi-asset exposure, and tax-efficient wrappers suggests product providers are responding to demand for sophistication beyond simple spot-price exposure.
Neither GSR nor Stratiphy disclosed specific fee structures or assets-under-management targets in the information made available at time of publication.
Analysis
Why This Matters
- Growing availability of regulated, tax-efficient crypto products lowers the barrier for mainstream investors in both the US and UK, potentially drawing significant new capital into digital asset markets.
- GSR's move from market maker to fund manager signals that crypto-native institutions are broadening their business models, increasing competition in the asset management space.
- Tax-free crypto access for UK investors, if widely adopted, could shift how British retail participants engage with digital assets and may prompt regulatory scrutiny from HMRC.
Background
The crypto ETF landscape shifted dramatically in January 2024 when the US Securities and Exchange Commission approved the first spot Bitcoin ETFs, followed by spot Ethereum ETFs later that year. These approvals unlocked billions in institutional inflows and legitimised regulated crypto fund products on a global scale.
In the UK, the Financial Conduct Authority had long restricted crypto ETN access to professional investors only, but relaxed those rules in mid-2024, allowing retail investors to access crypto ETNs through regulated platforms for the first time. This regulatory shift opened the door for platforms like Stratiphy to offer the kinds of products now being announced.
GSR, founded in 2013, built its reputation as a high-frequency market maker and liquidity provider across centralised and decentralised exchanges. Its entry into fund management follows a broader pattern of crypto-native firms diversifying into retail and institutional asset management as spot ETF approvals validate the asset class.
Key Perspectives
GSR and Crypto-Native Fund Managers: See actively managed multi-asset funds as a way to differentiate from passive ETFs, arguing their market-making expertise gives them an edge in dynamic allocation across volatile assets.
UK Retail Investors and Platforms like Stratiphy: Welcome tax-efficient wrappers as a practical solution to crypto's historically punishing tax treatment in the UK, viewing ETNs as a bridge between traditional portfolio management and digital asset exposure.
Critics and Regulators: Raise concerns about the complexity and counterparty risk inherent in ETNs compared to directly held assets, and question whether active management fees are justified in a market where passive exposure has historically performed well over bull cycles. HMRC may also scrutinise the precise structures used to claim tax advantages.
What to Watch
- Inflow data for Core3 in its first 90 days, which will indicate whether institutional and retail appetite exists for actively managed multi-asset crypto ETFs beyond simple Bitcoin products.
- FCA guidance or HMRC clarification on the specific tax treatment of crypto ETNs held in ISAs or SIPPs, which could significantly expand or restrict the UK tax-free opportunity.
- Whether competing asset managers follow GSR into multi-asset active crypto funds, and how quickly firms like BlackRock, Fidelity, or Franklin Templeton respond with similar products.