A $20 billion South African asset manager, Sygnia, has been cautioning its investors against over-investing in its Bitcoin exchange-traded fund (ETF) due to the cryptocurrency’s price volatility. In a recent interview with Bloomberg TV, Magda Wierzycka, the CEO of Sygnia, emphasized the importance of responsible investment practices when it comes to Bitcoin. The company’s primary concern is the highly volatile nature of Bitcoin, which can lead to significant losses if investors are not careful.
Wierzycka stated that Sygnia will intervene to ensure clients don’t shift too much of their portfolio to its ETF, Sygnia Life Bitcoin Plus, which is benchmarked off BlackRock’s iShares Bitcoin Trust. The company advises keeping investments in the Bitcoin vehicle at no more than 5% of discretionary assets or retirement annuities. This cautious approach is reflected in the company’s fact sheet, which provides guidance on responsible investment practices.
Bitcoin’s Price Volatility
Bitcoin has been experiencing significant price fluctuations, with its value drifting between $111,644 and $114,548 per coin in the last 24 hours, according to CoinGecko. The cryptocurrency’s seven-day range has been moving between $111,933 and $117,851. This volatility highlights the importance of careful investment practices and the need for investors to be aware of the potential risks involved.
Despite the risks, Sygnia’s Life Bitcoin Plus ETF has seen “very, very significant” inflows and a lot of interest since its launch in June. The company is planning to launch more crypto ETFs on the Johannesburg Stock Exchange in the future, after a previous attempt failed due to regulatory constraints. This expansion into the crypto market reflects the growing demand for cryptocurrency investment opportunities.
Long-Term Play
Wierzycka has changed her view on Bitcoin, now viewing it as a “long-term play” rather than a speculative asset. However, she believes that Bitcoin is currently overpriced at its current level of over $112,000 per coin. Other executives in the crypto ecosystem have forecast more bullish price targets, with BitMEX co-founder Arthur Hayes speculating that it could hit $250,000 per token by the end of the year.
As the cryptocurrency market continues to evolve, it’s essential for investors to approach Bitcoin and other digital assets with caution and careful consideration. Sygnia’s warnings and guidance on responsible investment practices serve as a reminder of the importance of prudent decision-making in the face of market volatility. For more information on the latest developments in the cryptocurrency market, visit the original source link.
