Sygnia urges caution as Bitcoin ETF attracts strong inflows amid volatility
South African asset manager Sygnia, which oversees around $20 billion in assets, has urged investors to be cautious about overexposure to its newly launched Life Bitcoin Plus ETF, citing the extreme volatility of the cryptocurrency market.
Magda Wierzycka, CEO of Sygnia, revealed in an interview that the company actively monitors client allocations and even contacts investors who allocate too much capital to the Bitcoin fund. “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,” she said.
Limiting Bitcoin ETF exposure
The Life Bitcoin Plus ETF, which launched in June, is benchmarked off BlackRock’s iShares Bitcoin Trust but does not allow investors to directly hold Bitcoin. Sygnia’s official guidance advises that exposure should not exceed 5% of discretionary assets or retirement portfolios.
Despite the warnings, Wierzycka admitted that Bitcoin may no longer be purely speculative, noting that she now views it as a “long-term play.” However, she cautioned that at current levels, Bitcoin remains “overpriced.”
Market backdrop and investor appetite
Bitcoin has recently been trading between $111,600 and $114,500 per coin in the past 24 hours, with a weekly range extending as high as $117,851, according to market trackers. Despite the volatility, the ETF has seen “very significant inflows” since launch, though Sygnia has not disclosed figures.
Industry data shows that crypto exchange-traded products attracted $1.9 billion in inflows last week, led by Bitcoin and Ethereum-based funds, highlighting growing institutional interest.
Sygnia plans to expand its offerings with additional crypto ETFs on the Johannesburg Stock Exchange after regulatory hurdles stalled previous attempts. “There is huge investor demand,” Wierzycka noted, but emphasized that the firm’s role is to balance access with responsible risk management.
While Sygnia remains cautious, other industry leaders are far more bullish. BitMEX co-founder Arthur Hayes has projected Bitcoin could reach $250,000 by year-end, while MicroStrategy’s Michael Saylor reiterated his extreme long-term forecast of $21 million per Bitcoin by 2042.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.