Swiss digital asset bank Sygnum has launched the BTC Alpha Fund in partnership with Athens-based Starboard Digital, targeting net annual returns of 8% to 10% paid directly in Bitcoin — a product designed for institutional investors who want to grow their BTC holdings without selling into dollar exposure.
The BTC Alpha Fund generates yield through arbitrage trading strategies rather than lending or protocol staking, meaning investors maintain full price exposure to Bitcoin while the fund captures market inefficiencies across exchanges and derivative markets. Returns are converted into Bitcoin and credited directly to investor accounts, compounding their coin count over time. Monthly liquidity windows allow redemptions, and shares in the fund can be pledged as collateral for U.S. dollar Lombard loans at Sygnum — enabling investors to access leverage or liquidity without selling their underlying BTC position.
Markus Hämmerli, leading the offering at Sygnum, stated: "Bitcoin has become a key exposure in modern portfolios, and many of our clients want to stay invested while building their positions further."
The fund is domiciled in the Cayman Islands and targets professional and institutional investors. Sygnum's decision to domicile the vehicle offshore while marketing it through its Swiss-regulated banking infrastructure reflects the dual compliance architecture increasingly common in institutional digital asset products — Swiss regulatory oversight for custody and client onboarding, offshore fund structuring for investment flexibility.
The fund launch arrives as Bitcoin DeFi has attracted serious institutional attention. Binance Research estimates that only approximately 0.8% of the global Bitcoin supply is currently deployed in decentralized finance protocols, implying a potential market of roughly $1 trillion in currently idle BTC that could generate yield without leaving Bitcoin's security model. Sygnum is positioning the BTC Alpha Fund as a regulated bridge to this opportunity — offering the yield profile of DeFi participation within a framework acceptable to pension funds, family offices, and regulated asset managers.
For institutional investors, Sygnum's BTC Alpha Fund addresses one of the most persistent questions in crypto portfolio construction: how to generate yield on Bitcoin without compromising security assumptions or triggering taxable disposal events. The arbitrage approach sidesteps the smart contract risk inherent in protocol-based yield strategies, while the Lombard loan feature adds optionality for leveraged plays or liquidity extraction. As the BTC DeFi ecosystem matures, regulated yield products backed by Swiss banking infrastructure are likely to attract significant flows from the conservative end of the institutional spectrum.
Keywords: Finance|Sygnum Bank|DeFi|Bitcoin|News
Source: CoinDesk