EddieJayonCrypto
1 Oct 25
Swiss bank Sygnum launches the BTC Alpha Fund, enabling Bitcoin holders to earn 8-10% annual yields via arbitrage strategies while maintaining price exposure. The fund, developed with Starboard Digital, allows reinvestment of gains in BTC and targets institutional investors seeking yield without liq...
**Sygnum Launches BTC Alpha Fund to Generate Yield on Bitcoin Without Sacrificing Price Exposure** Swiss digital asset bank Sygnum has introduced the BTC Alpha Fund, a novel investment vehicle designed to generate yield on Bitcoin (BTC) while preserving investors’ exposure to its price movements. Developed in collaboration with Athens-based Starboard Digital, the fund employs arbitrage strategies to target net annual returns of 8% to 10%, with earnings distributed directly in Bitcoin. This innovation caters to professional and institutional investors seeking to maximize returns from their BTC holdings without liquidating their positions. The BTC Alpha Fund, domiciled in the Cayman Islands, allows participants to reinvest arbitrage gains into Bitcoin, effectively increasing their coin holdings while still benefiting from the asset’s long-term price appreciation. Sygnum reported strong early interest from clients eager to explore institutional-grade yield opportunities in the digital asset space. The fund aligns with a growing trend among institutional investors to move beyond passive Bitcoin holdings and leverage decentralized finance (DeFi) to generate income. Analysts highlight the vast potential of Bitcoin’s DeFi ecosystem, which remains underpenetrated. Binance research indicates that only approximately 0.8% of Bitcoin’s total supply is currently utilized in DeFi protocols, signaling a significant "untapped opportunity." Julian Love, a deal analyst at Franklin Templeton Digital Assets, previously estimated this potential could reach up to $1 trillion. Markus Hämmerli, who leads the BTC Alpha Fund offering at Sygnum, emphasized the demand from clients to "stay invested while building their positions further." The fund’s structure addresses this need by enabling investors to unlock liquidity through shares pledged as collateral for U.S. dollar Lombard loans at Sygnum. This mechanism allows long-term Bitcoin holders to access capital for other investments without selling their crypto exposure. To manage the inherent volatility of digital assets, the fund offers monthly liquidity and a stringent risk management framework. The partnership with Starboard Digital, a firm with expertise in trading and risk management, underscores the product’s focus on stability and performance. Sygnum’s launch of the BTC Alpha Fund marks another step in its expansion of Bitcoin-related offerings. Since 2022, the bank has introduced various initiatives to bridge traditional finance and the crypto economy, with the new fund adding to its suite of regulated products. As institutional interest in Bitcoin continues to grow, innovations like the BTC Alpha Fund reflect the evolving landscape of digital asset management, where yield generation and portfolio optimization are becoming increasingly intertwined.