A South African ETF issuer is warning investors about its own Bitcoin fund.
A $20 billion South African asset manager is warning investors against overinvesting in their Bitcoin exchange-traded fund due to its price volatility.
Magda Wierzycka , Sygnia's CEO, said the company would ensure clients do not shift too much of their portfolios to its Sygnia Life Bitcoin Plus ETF, which is compared to BlackRock's iShares Bitcoin Trust.
However, she later acknowledged that Bitcoin could be a long-term investment.
Wierzycka said Sygnia, South Africa's second-largest multi-asset fund, is most concerned about Bitcoin's price volatility.
“The underlying asset is extremely volatile. You need to be very confident in the information being disseminated about it and not make promises you can't keep,” the woman explained.
In its newsletter, the company also recommends keeping Bitcoin investments to no more than 5% of discretionary assets or retirement annuities.
According to CoinGecko, Bitcoin has fluctuated between $111,644 and $114,548 per coin over the past 24 hours, while its seven-day range has been between $111,933 and $117,851.
Sygnia plans to offer more crypto ETFs
Sygnia's Life Bitcoin Plus exchange-traded fund was launched in June. It does not allow users to directly hold bitcoin.
Wierzycka said the ETF is seeing “very, very significant” inflows and a lot of interest, but did not disclose the total amount.
According to Wierzycki, Sygnia's announcement comes as the company plans to launch more crypto ETFs on the Johannesburg Stock Exchange in the future after a previous attempt failed due to regulatory restrictions.
Cryptocurrency exchange-traded products (ETPs) saw $1.9 billion in inflows last week, led by Bitcoin and Ethereum (ETH), with $977 million and $772 million in inflows, respectively.
Bitcoin remains a long-term investment
Wierzycka said that despite her company's attempts to persuade clients to limit their participation in the Bitcoin ETF, she has changed her mind about the token and now views it as a “long-term investment” rather than a speculative asset.
However, according to her, it is overvalued at its current level. Following the recent market decline, Bitcoin is trading at over $112,000 per coin.
Other executives working in the crypto ecosystem are predicting a more optimistic price target.
BitMEX co-founder Arthur Hayes suggested the price could reach $250,000 per token by the end of the year, while Strategy founder Michael Saylor recently reiterated his prediction of $21 million per bitcoin by 2042.
Source: cryptonews.net
