Investors who over-allocate to their Life Bitcoin Plus ETF are contacted by the firm, according to Sygnia CEO Magda Wierzycka. The fund was launched in June.
Investors of a $20 billion South African asset manager have been cautioned against over-investing in its Bitcoin exchange-traded fund due to the asset’s price volatility.
Sygnia CEO Magda Wierzycka stated in a Monday interview on Bloomberg TV that measures will be taken by the firm to ensure clients do not over-allocate their portfolios to its Sygnia Life Bitcoin Plus ETF, which is benchmarked against BlackRock’s iShares Bitcoin Trust.
It was later acknowledged by her that Bitcoin could be turning into a long-term investment.
Bitcoin’s price volatility was cited as the main concern by Sygnia, the second-largest multi-manager in South Africa, according to CEO Magda Wierzycka.
“The underlying asset is highly volatile. You need to be very sure about the messaging around it and you need to be sure that you don’t make promises that you can’t meet.”
In its fact sheet, it is also advised by the company that investments in the Bitcoin vehicle be kept at a maximum of 5% of discretionary assets or retirement annuities.
According to CoinGecko, the price of Bitcoin has been trading between $111,644 and $114,548 over the last day. Its seven-day range was established between $111,933 and $117,851.
Sygnia Plans to Expand Its Crypto ETF Offerings
Launched in June, Sygnia’s Life Bitcoin Plus fund does not permit users to hold Bitcoin directly.
While the ETF has experienced “very significant” inflows and strong interest, the total was not disclosed by Wierzycka.
The messaging from Sygnia comes as the firm plans to launch additional crypto ETFs on the Johannesburg Stock Exchange in the future, following a previous attempt that was hindered by regulatory constraints, according to Wierzycka.
A total of $1.9 billion in inflows was recorded by crypto exchange-traded products last week, with Bitcoin and Ether leading the way with contributions of $977 million and $772 million, respectively.
Bitcoin Remains a Long-Term Investment
Despite her firm trying to persuade clients to limit their exposure to Bitcoin ETFs, Wierzycka’s view on the token has been altered, and she now sees it as a “long-term play,” rather than a speculative asset.
However, Bitcoin is believed to be overpriced at its current levels, she said. The asset is trading for over $112,000 per coin following a recent market downturn.
A more bullish price target has been forecast by other executives in the crypto ecosystem.
A price of $250,000 per token by year-end has been speculated by BitMEX co-founder Arthur Hayes. Meanwhile, Strategy founder Michael Saylor recently reaffirmed his prediction of $21 million per Bitcoin by 2042.
