In a move signaling a potential shift in institutional support for crypto assets infrastructure, M&G Investments, a division of pensions giant M&G, has invested $20 million in the UK-based crypto derivatives trading platform, Global Futures & Options Holding (GFO-X). This strategic investment, part of a larger $30 million series B funding round, aims to revive institutional confidence in digital assets, particularly following challenges faced by platforms like FTX.
GFO-X, holding a license from the UK’s Financial Conduct Authority (FCA), provides a platform for global institutional investors to engage in the trading of digital asset futures and options. The platform’s transactions are cleared at the London Stock Exchange Group’s Paris clearing arm, LCH SA.
Key Highlights of the Investment:
- Regulated Crypto Trading Venue: M&G’s funding, led by its Crossover strategy on behalf of the £129 billion Prudential With-Profits Fund, underscores the increasing importance of regulated trading venues in the crypto derivatives market. The move is seen as contributing to the UK’s potential to emerge as a global hub for crypto asset technology and investment.
- Strategic Partnership with LCH SA: The investment aligns with GFO-X’s strategic partnership with LCH SA, majority-owned by the London Stock Exchange Group. The collaboration aims to leverage LCH’s DigitalAssetClear clearing service for Bitcoin index futures and options contracts traded on the GFO-X platform.
- Pending Launch and Regulatory Approval: While the initial launch of GFO-X was anticipated by the end of 2023, regulatory approval for LCH DigitalAssetClear is pending. As a result, the expected launch of GFO-X is now slated for the first quarter of 2024.
Anticipating a Crypto Market Resurgence
M&G’s investment reflects a broader trend of renewed interest in crypto markets, particularly fueled by expectations surrounding the potential approval of a spot bitcoin exchange-traded fund (ETF) in the U.S. Approval of such an ETF could trigger a surge of liquidity from traditional institutions seeking regulated access to digital assets.
Jeremy Punnett, portfolio manager at M&G, emphasizes the significance of regulated trading venues for the growth of the crypto derivatives trading market. He underscores the UK’s potential to become a global hub, positioning London as an attractive destination for GFO-X’s new global trading exchange.
GFO-X’s Gratitude and Future Plans
GFO-X, in a statement, expresses gratitude for M&G’s strategic investment, highlighting its role in funding the platform’s launch and supporting future innovations in the regulated digital asset sector. As part of the deal, M&G secures a seat on the board of GFO-X Holdings, reinforcing its commitment to fostering trust and credibility in the evolving market of digital asset derivatives.
Q: What is the significance of M&G’s investment in GFO-X?
M&G’s investment, part of a larger funding round, aims to boost institutional confidence in crypto-assets and signifies a potential shift in institutional support for regulated digital asset infrastructure.
Q: How does GFO-X plan to utilize the funding from M&G?
A: GFO-X intends to use the strategic investment from M&G to fund the platform’s launch and support future innovations in the regulated digital asset sector.
Q: What role does the UK play in the growth of the crypto derivatives trading market?
A: The UK is seen as having the potential to become a global hub for crypto asset technology and investment, with regulated trading venues contributing to the growth of the crypto derivatives trading market.