Abrn bets on crypto with stake in start-up exchange

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Abrdn (ABDN) has become the latest asset manager to bet on cryptocurrency, with the FTSE 100 firm buying a stake in digital securities exchange Archax.

Founded by former hedge fund directors, the Archax platform enables institutions to trade cryptocurrencies and other securities.

According to its website, the London-based firm is the first digital securities exchange regulated by the FCA and ‘offers a credible bridge between the blockchain world and the existing investment space’.

The deal, first reported by the Financial Times, will give Abrn a seat on Archax’s board.

Russell Barlow, global head of alternatives at Abrdn, told the FT: ‘Our view is that the next disruptive event will be the transfer from electronic trading to digital exchanges and trading through digital securities. Being there at the beginning is going to put us in a really strong position.’

CEO Stephen Bird said the deal is about getting Abrn into blockchain technology.

‘Blockchain technologies are inevitably going to form a big part of the future of financial markets. There is the potential to offer greater transparency, greater speed and less trading friction by using these nascent digital technologies,’ he said.

‘With Archax, we will have a meaningful footprint in this fast-developing market – which is likely to evolve in a multitude of different ways that are relevant to our core businesses.’

Abrdn’s move follows similar steps by other large asset managers to get into cryptocurrencies and blockchain in recent months.

Last month Schroders bought a stake in blockchain- and digital-focused asset management firm Forteus.

And yesterday BlackRock announced it was launching a bitcoin private trust in the US.

The fund manager said in a blogpost that despite the huge selloff it is still seeing ‘substantial interest’ from some institutions in cryptocurrencies, our sister title Citywire Professional Buyer reported.

BlackRock’s Aladdin platform last week announced it had teamed up with Coinbase to offer institutional clients access to digital assets trading, starting with bitcoin.

Chris Brendler, a senior research analyst at DA Davidson, told the FT: ‘Large asset managers are starting to consider this a real investment. I think it’s a major data point in terms of traditional asset management companies embracing what really for years has been almost ridiculed.’

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