The Ontario Teachers’ Pension Plan (OTPP), which manages over $190 billion in assets, has decided to steer clear of cryptocurrencies following the loss of its $95 million investment in the now-bankrupt FTX crypto exchange in November 2022. OTPP had invested twice in FTX, once during the peak of the bull run in 2021 and again in early 2022 during the exchange’s Series C funding round.
In an interview with the Financial Times, OTPP CEO Jo Taylor said that the pension fund would exercise caution before investing in emerging assets like digital currencies. The pension fund is responsible for offering pensions to over 330,000 teachers and school workers.
Following the FTX debacle, OTPP is looking to direct its investment toward more traditional markets, such as real estate, and gain exposure to the private credit sector. The investment plan provider is looking to invest 10 billion Canadian dollars ($7.4 billion) over the next three years in these areas.
OTPP is not alone in suffering losses from cryptocurrency investments. The Caisse de dépôt et placement du Québec (CDPQ), another prominent pension fund, lost its entire investment of $154.7 million in the troubled cryptocurrency lender Celsius Network. Celsius was one of many crypto lenders that went under during the crypto contagion in the second quarter of 2022.
The collapse of FTX, which was the third-largest crypto exchange at the time, had a significant impact on the entire cryptocurrency ecosystem. Investor and venture capitalist confidence in the crypto market plummeted, while crypto funding dried up. It also drew regulatory scrutiny from around the world and flipped the narrative on mass adoption of cryptocurrencies.
