In an important development for institutional adoption In the digital assets sector, M&G Investments, the asset management arm of pension giant M&G Plc, has invested $20 million in a UK-based cryptocurrency derivatives trading platform.
According to a recent Bloomberg report, this move represents a step forward in restoring institutional trust in the cryptocurrency market following the FTX collapse last year. report.
High scores for cryptocurrency derivatives platform
M&G Investments acquired the stake as part of a $30 million Series B, according to Bloomberg. funding round For Global Futures and Options Ltd., known as GFO-X.
The capital injection was made on behalf of M&G’s £129 billion Prudential With-Profits Fund and is evidence of growing interest from traditional asset managers in the cryptocurrency space.
GFO-X, which signed a strategic partnership with LCH SA, a subsidiary majority-owned by London Stock Exchange Group (LSEG), earlier this year, will utilize LCH’s clearing service, DigitalAssetClear.
This service is specifically designed for liquidating Bitcoin (BTC). index futures Options contracts traded on the GFO-X platform. The partnership aims to enhance the efficiency and security of cryptocurrency derivatives trading by leveraging LCH’s expertise in clearing and risk management.
LCH DigitalAssetClear’s partnership with GFO-X was initially expected to launch by the end of 2023, but regulatory approval for LCH DigitalAssetClear is still pending. However, a GFO-X spokesperson told Bloomberg that the platform is expected to launch in the first quarter of 2024.
Has market optimism been renewed?
According to the report, M&G’s significant investment in GFO-X serves as a notable indicator of the changing tide of institutional support for digital asset infrastructure.
of failure FTX Exchange In November 2022, traditional asset managers, including Ontario Teachers’ Pension Plan, Tiger Global Management and Singapore’s Temasek Holdings, suffered tens of millions of dollars worth of losses by reducing their holdings to zero. . M&G’s entry into the sector signals renewed optimism and increased confidence among agency officials.
The report further highlights that M&G Investments’ investment not only significantly enhances GFO-X, but also strengthens the broader narrative of institutional acceptance and participation in the cryptocurrency derivatives market.
like regulatory framework As innovative platforms like GFO-X continue to mature and gain traction, institutional adoption of cryptocurrency derivatives is poised to enter a new phase of growth and development.
As of this writing, the global cryptocurrency market remains volatile following a sharp price drop, which dropped the market capitalization to $1.502 trillion. According to data For CoinGecko, this represents a retracement of 5.59% over the past 24 hours and growth of 82.77% from a year ago.
Among various digital assets, Bitcoin (BTC) remains the dominant force with a market capitalization of $811 billion. This puts Bitcoin’s dominance at 53.30%, indicating that Bitcoin continues to hold a significant share of the overall cryptocurrency market.
Featured image from Shutterstock, chart from TradingView.com