Crypto News: London-based Pension Fund Invests $20 Million in Crypto Derivatives Platform

Traditional market players have started warming up to the crypto market amid a strong resurgence in Bitcoin (BTC) and the broader crypto market this year. In the latest development, London-based pension giant M&G Plc. has invested a staggering $20 million in a British crypto derivatives trading platform.

M&G Investments Makes Bold Move

M&G Investments, the asset management arm of pension giant M&G Plc, has invested $20 million in a UK-based crypto derivatives trading platform, GFO-X. This move signals a positive shift in institutional confidence towards digital assets following the collapse of FTX last year. The investment is part of a $30 million series B funding round for GFO-X, with M&G’s Crossover strategy contributing on behalf of the £129 billion Prudential With-Profits Fund.

GFO-X had previously formed a strategic partnership with LCH SA, a London Stock Exchange Group-majority owned entity, with plans to launch a service called LCH DigitalAssetClear by the end of 2023. This service aims to clear Bitcoin index futures and options contracts traded on GFO-X, and although it has faced some delays due to client demand, it is expected to go live in the first quarter of 2024.

M&G’s investment in GFO-X signifies a potential reversal in institutional support for cryptoasset infrastructure. The collapse of FTX in November 2022 led traditional asset managers, including Ontario Teachers’ Pension Plan, Tiger Global Management, and Singapore’s Temasek Holdings, to write down their stakes to zero.

Pension Fund Buying of Crypto

Traditional institutional players have been expanding their footprint in the crypto space and the developments are clear this year. Analysts expect that with the arrival of spot Bitcoin ETF, exposure of traditional financial institutions to the crypto market is likely to grow from here onwards.

Apart from investing directly in crypto, big players and government institutions are also seeking exposure to crypto firms. During the third quarter of 2023, South Korea’s largest investment group, the National Pension Service, made an investment in Coinbase (NASDAQ: COIN).

This marks the first instance of the National Pension Service including a virtual asset-related company in its U.S. stock portfolio. As per the stock holdings report submitted to the U.S. Securities and Exchange Commission (SEC) on the 16th, the National Pension Service procured 282,673 shares of Coinbase stock during the third quarter, amounting to a value of $19,934,100, approximately equivalent to 26.1 billion won.