Sovereign Funds and Pension Fund Capital Invests in FTX Trading Company

Posted on 10/21/2021

FTX Trading is a cryptocurrency exchange platform that allows users to trade cryptocurrencies. In September 2021, FTX moved their headquarters from Hong Kong to The Bahamas. FTX raised a new round of capital – US$ 420 million – giving it a valuation of US$ 25 billion. These investors include Tiger Global Management, Temasek Holdings, and Ontario Teachers’ Pension Plan Board, bringing a total of attracting 69 investors. This is a continuation of an earlier Series B funding round from July 2021. The July part raised US$ 1 billion from SoftBank Group Corporation, Temasek, Sequoia Capital, Third Point Management, Paul Tudor Jones, Alan Howard of Brevan Howard Asset Management, and other investors giving FTX and valuation of US$ 18 billion.

Sam Bankman-Fried and Gary Wang founded FTX, which is the owner and operator of the cryptocurrency exchange. The platform is currently not available to residents in the United States.

Superbowl Football champ Tom Brady and Gisele Bundchen are also investors in FTX. In August 2020, FTX acquired Blockfolio, a cryptocurrency portfolio tracking app, for US$ 150 million.

Binance, a competitor which invested in the FTX Trading in 2020, divested of its share in 2021.

Some sovereign funds are embracing the cryptocurrency sector, while other like Norway Government Pension Fund Global do not wish to partake in Bitcoin and other digital currencies. The launch of the Bitcoin futures ETF has lulled more investors in into the market. Seeing low correlations to other asset classes, the Houston Firefighters’ Relief and Retirement Fund invested US$ 25 million in Bitcoin and Ether through NYDIG, a Bitcoin-focused subsidiary of asset manager Stone Ridge. The firefighters’ pension fund preferred buying crypto direct vs. the futures crypto ETF.

Keywords: Ontario Teachers Pension Plan Board.

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