South Africa-based Sygnia Ltd., a $20 billion asset management firm, is advising investors to limit their exposure to Bitcoin despite robust inflows into its newly launched crypto fund. The firm introduced the Sygnia Life Bitcoin Plus fund in June, which tracks the iShares Bitcoin Trust ETF, and has explicitly recommended that clients allocate no more than 5% of their discretionary or retirement annuity assets to the product.
According to CEO Magda Wierzycka in a Bloomberg TV interview on September 22, Sygnia actively intervenes when clients attempt to allocate their entire portfolios to the fund, warning of Bitcoin's extreme volatility. Bitcoin has surged over 80% in the past year but dropped more than 2.4% recently, highlighting ongoing price swings. Wierzycka emphasized, "Our role is to prevent investors from taking on disproportionate risk. Bitcoin is exciting, but it's not a guaranteed path to wealth. It needs careful management within a diversified portfolio."
The caution is partly driven by concerns that emerging markets like South Africa, with lower per capita incomes, may face heightened volatility. Sygnia plans to introduce additional crypto ETFs on the Johannesburg Stock Exchange pending regulatory approval, aiming to balance adoption with investor safety. Globally, Bitcoin-related exchange-traded products now hold over 1.47 million BTC (about 7% of supply), led by U.S. funds like BlackRock's IBIT and Fidelity's FBTC, though August saw $301 million in Bitcoin ETP outflows amid a shift toward Ethereum-focused funds.