CoinShares adds Virtu Financial as market maker for crypto ETPs

This is a microstructure-positive development for crypto ETP liquidity rather than a fundamental demand signal. Adding a second market maker typically tightens spreads, reduces creation/redemption friction, and improves intraday tracking, which can mechanically attract allocators who were previously deterred by wider basis or stale pricing. The biggest winner is likely the issuer’s distribution engine: better execution quality can translate into higher AUM velocity even if spot crypto prices are flat.

The second-order effect is more interesting for the broader ecosystem: improved ETP liquidity tends to concentrate flow into the most institutionally “served” wrappers, not necessarily into the underlying assets directly. That favors BTC over smaller cap proxies because institutions tend to allocate where market making is deepest and operational risk is lowest. For ETH staking products, tighter market making can also amplify the appeal of yield-bearing wrappers versus non-yielding spot exposure, which is a relative advantage when real rates are compressing.

The main risk is that this is a structural improvement with limited immediate alpha unless accompanied by a catalyst that drives net inflows. Over days, the market may ignore it; over months, it matters if it lowers the hurdle rate for new allocators, especially in Europe where ETP usage is more flow-sensitive than in the US. The contrarian point is that better liquidity can also reduce the scarcity premium in the product itself, making it easier for fast money to arb away dislocations and compress issuer margins.

I would not chase the headline as a standalone catalyst, but I would treat it as a bullish setup for relative inflow capture into the most liquid crypto wrappers if BTC volatility re-accelerates. The clearest implication is a likely widening of the gap between institutionally accessible products and the rest of the crypto basket, with the former absorbing incremental marginal dollars first.