Sygnia Cautions Investors About Bitcoin ETF Volatility
A $20 billion South African asset manager is cautioning investors against allocating too much of their portfolios into their Bitcoin exchange-traded fund due to its price volatility.
Sygnia CEO Discusses Bitcoin ETF Risks
In a Monday interview, Magda Wierzycka, the CEO of Sygnia, shared insights with Bloomberg TV, explaining that the company plans to actively intervene to prevent clients from overcommitting to its ETF, Sygnia Life Bitcoin Plus, which is based on BlackRock’s iShares Bitcoin Trust.
She acknowledged, however, that Bitcoin may develop into a long-term investment.
Wierzycka highlighted that Sygnia, recognized as South Africa’s second-largest multi-manager, is primarily concerned with the price volatility of Bitcoin.
According to its fact sheet, Sygnia recommends that investments in the Bitcoin vehicle should not exceed 5% of discretionary assets or retirement annuities.
As of now, Bitcoin has been fluctuating between $111,644 and $114,548 per coin over the past 24 hours, with a seven-day range between $111,933 and $117,851, as reported by CoinGecko.
Launched in June, Sygnia’s Life Bitcoin Plus does not permit users to directly hold Bitcoin.
Wierzycka mentioned that the ETF has attracted “very, very significant” inflows and interest, though she did not disclose the total figures.
Sygnia aims to introduce more crypto ETFs on the Johannesburg Stock Exchange in the future after a prior attempt was thwarted due to regulatory issues, according to Wierzycka.
In the previous week, crypto exchange-traded products experienced $1.9 billion in inflows, with Bitcoin and Ether (ETH) leading the pack with $977 million and $772 million in inflows, respectively.
Despite urging clients to limit their exposure to Bitcoin ETFs, Wierzycka expressed her evolving perspective on the token, now considering it a “long-term play” instead of merely a speculative investment.
However, she also stated that Bitcoin appears overpriced at its current levels, trading above $112,000 per coin following a recent market dip.
Other leaders in the crypto field are projecting more optimistic price targets. BitMEX co-founder Arthur Hayes predicts Bitcoin could reach $250,000 per token by year-end, while Strategy founder Michael Saylor reiterated his forecast of $21 million per Bitcoin by 2042.
