M&G Investments Boosts Confidence in Crypto Derivatives with $20M Funding

M&G Investments, the asset management division of pensions giant M&G, has invested $20 million into Global Futures & Options Holding (GFO-X), a UK-based crypto derivatives trading platform. This investment, part of a larger $30 million series B funding round, aims to rekindle institutional confidence in digital assets following the downfall of FTX last year.

GFO-X, licensed by the UK’s Financial Conduct Authority (FCA), enables global institutional investors to trade digital asset futures and options cleared at the London Stock Exchange Group’s Paris clearing arm, LCH SA. 

M&G’s funding, led by its Crossover strategy on behalf of the £129 billion Prudential With-Profits Fund, signals a potential shift in institutional support for cryptoasset infrastructure.

The investment comes amidst GFO-X’s strategic partnership with LCH SA, majority-owned by the London Stock Exchange Group. The collaboration aims to utilize LCH’s DigitalAssetClear clearing service for Bitcoin index futures and options contracts traded on the platform. While the launch was initially anticipated by the end of 2023, regulatory approval for LCH DigitalAssetClear is pending, pushing the expected launch of GFO-X to the first quarter of 2024.

Anticipating a Crypto Market Resurgence

M&G’s move echoes a broader trend of renewed interest in crypto markets, buoyed by anticipation surrounding the approval of a spot bitcoin exchange-traded fund (ETF) in the U.S. If approved, this ETF could unlock a surge of liquidity from traditional institutions seeking regulated access to digital assets.

Jeremy Punnett, portfolio manager at M&G, highlighted the significance of regulated trading venues for the growth of the crypto derivatives trading market. He emphasized the UK’s potential to become a global hub for crypto asset technology and investment, positioning London as an attractive destination for GFO-X’s new global trading exchange.

GFO-X, in its statement, expressed gratitude for M&G’s strategic investment, emphasizing that it would fund the platform’s launch and support future innovations in the regulated digital asset sector. As part of the deal, M&G will secure 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.