M&G Invests $20M in UK Bitcoin Derivatives Platform GFO-X

UK asset management firm M&G Plc announced it has invested $20 million in the bitcoin derivatives exchange, Global Futures & Options Holdings (GFO-X) looking to support “regulated trading of digital assets” and meet demand from institutional investors.

GFO has a partnership with London Clearing House, which is regulated by the Financial Conduct Authority (FCA) and will act as a clearing house and trading venue for digital currency asset derivatives.

The funding was led by M&G’s public equity investment division, and provided by M&G’s Crossover strategy in a series B funding round on behalf of its £129 billion Prudential With Profits Fund.

Lack of Regulated Venues Hampering Growth 

Since the collapse of ​​FTX, a cryptocurrency exchange that facilitated spot, derivatives, and leveraged trading for cryptocurrencies sent the price of Bitcoin to its lowest price since 2020. Over the years there has been a lack of trust in the space and a call for more regulation around exchanges.

“The lack of regulated trading venues is materially hampering the growth of the digital currency trading market,” said M&G Portfolio Manager, Jeremy Punnett, in a press release.

“The UK has the potential to become a global hub for digital asset technology and investment, making London an excellent destination for GFO-X’s new global trading venue. This investment enables GFO-X to scale its operations as the business is set to benefit from investors shifting their trading from unregulated to regulated venues,” adds Punnett.

M&G went on to highlight that GFO-X will target traditional financial institutions wanting to trade digital currency derivatives in a safe and regulated venue.

According to M&G A 2022 survey showed there is significant demand from institutional investors for infrastructure.  It is estimated 91% of institutional investors are interested in tokenised products, 41% currently hold cryptocurrencies and a further 15% plan on adding digital assets to their portfolios over the medium term.