In a significant move indicating increasing institutional confidence in digital assets, M&G Plc., a renowned pension firm based in London, has invested $20 million in a British crypto derivatives trading platform, GFO-X. This investment is a key component of a $30 million Series B funding round for GFO-X. M&G Investments, the asset management division of M&G Plc, allocated the funds, utilizing the Crossover strategy from the substantial £129 billion Prudential With-Profits Fund.
The decision by M&G Plc. to venture into the cryptocurrency sector follows a period of skepticism from traditional financial institutions, particularly after the collapse of the FTX exchange in November 2022. This move by a prominent London pension firm is a potential reversal in the trend of institutional support for crypto asset infrastructure.
M&G joins the trend of traditional crypto investment
GFO-X, before receiving this investment, had already established a strategic alliance with LCH SA, a company majorly owned by the London Stock Exchange Group. Their collaboration is poised to introduce LCH DigitalAssetClear, a service slated to launch by early 2024. Initially planned for the end of 2023 but delayed due to client demand, this service is designed to clear Bitcoin index futures and options contracts traded on the GFO-X platform.
The involvement of M&G Plc. in this venture not only injects substantial capital but also adds a layer of credibility and stability to the crypto derivatives market, particularly in London. This is a positive signal for the broader crypto market, which is recovering steadily this year.
The move by M&G Plc. is not an isolated event but part of a broader trend of traditional financial institutions warming up to the crypto market. The National Pension Service of South Korea, the country’s largest investment group, also made a significant move by investing in Coinbase, marking its first foray into virtual asset-related companies in its U.S. stock portfolio. This investment totaled approximately $19.9 million for 282,673 shares, as reported to the U.S. Securities and Exchange Commission.
This growing interest from traditional financial players in London and globally suggests a more stable and mature phase for the cryptocurrency market. Analysts predict that the potential introduction of a spot Bitcoin ETF could further escalate the involvement of conventional financial institutions in the crypto sector.
M&G Plc ushers a new era in crypto
The investments by M&G Plc. and other traditional financial entities signify a new era of institutional involvement in cryptocurrency. This shift is expected to bring more stability, maturity, and regulatory clarity to a market known for its volatility and unpredictability. The move by these institutions, particularly from a key financial hub like London, also indicates a growing recognition of the potential and legitimacy of digital assets in the mainstream financial world.
The $20 million investment by London-based M&G Plc. in a crypto, derivatives trading platform marks a significant shift in traditional financial institutions’ perception and acceptance of digital assets. This trend, echoed by other major players globally, paves the way for a more integrated and stable future for the cryptocurrency market, bridging the gap between traditional finance and the evolving world of digital assets.
