According to recent developments, the Ontario Teachers’ Pension Fund has vowed to move away from cryptocurrencies. The decision was made following the losses suffered by the fund after the collapse of FTX, during which the OTPP lost all of its investments worth nearly $95 million.
The Ontario Teachers Pension Plan was classified as one of the many backers of the bankrupt crypto exchange. The plan invested in FTX not once, but twice, with the first one being in the bull market of 2021, and the second time during the Series C funding for the firm in 2022. The chief of Ontario Teacher’s Pension Plan, Jo Tayler, has made it clear that it would be unwise for the firm to opt for another crypto investment, especially after the collapse of FTX and the current Bear market.
Tayler further added,
“We took our time and did a lot of due diligence on the business. It didn’t turn out the way we thought. We weren’t necessarily shown all the information we needed to know to make a balanced decision.”
OTPP is still processing what really happened to the FTX exchange, which is why it aims to show increased vigilance and scrutiny if it ever plans to invest in digital assets or emerging technologies again.
However, as long as the pension fund is concerned, it is responsible for offering pensions to more than 330K teachers and workers. Currently, the Ontario Teachers Pension Plan is looking forward to investments in the traditional markets, like the real estate, and is also hoping to expand in the private credit sector. The OTPP will invest around $7.4 billion in different sectors in the next three years to build a strong portfolio.
The Ontario Teachers Pension Fund Is not the Only Victim
The Ontario Teachers Pension Fund was not the only one to lose all of its investments amid the extended crypto winter. Along with FTX, many other crypto firms went through bankruptcy. Another well-known pension fund, the CDPQ, lost all of its investment, worth approximately $154.7 million, in the unstable Celsius Network. The firm was among crypto-based organizations that went under in 2022.
The collapse of the FTX exchange shook the crypto market to its core. The confidence and the willingness of investors to trade dropped to the ground, resulting in the stream of crypto investments drying up. Furthermore, the collapse was also able to flip the crypto ecosystem’s narrative regarding mass adoption and also led to increased regulatory actions.