Swiss digital asset bank Sygnum is launching a fund to help investors maximize their Bitcoin yield while retaining price exposure.
Summary
- Digital asset bank Sygnum partnered with Starboard Digital to launch BTC Alpha Fund
- The fund gives investors exposure to the BTC price while also generating yield
- Starboard Digital will be in charge of arbitrage to generate yields
Swiss digital asset bank Sygnum launched a product for investors who want to earn yield on Bitcoin without sacrificing price exposure. On Thursday, October 1, Sygnum launched the BTC Alpha Fund in collaboration with an Athens-based digital asset trading firm, Starboard Digital, according to a press release seen by crypto.news.
โBitcoin has become a key exposure in modern portfolios, and many of our clients want to stay invested while building their positions further,โ said Markus Hรคmmerli, who is leading the BTC Alpha Fund offering at Sygnum. โThe BTC Alpha Fund helps investors participate in Bitcoinโs price performance while aiming to earn additional Bitcoin through trading returns, all within an institutional-grade framework.โ
BTC Alpha Fund, domiciled in the Cayman Islands, will target 8โ10% annual Bitcoin-denominated returns, net of fees, with payouts also in Bitcoin (BTC). Starboard Digital will be in charge of yield generation through arbitrage trading, while Sygnum will serve as a custodian. The two firms did not disclose which type of arbitrage strategies they will use.
โGenerating yield on Bitcoin while maintaining exposure to its appreciation potential has been a key challenge for institutional investors,โ said Nikolas Skarlatos of Starboard Digital. โOur partnership with Sygnum delivers one of the few high-quality institutional setups available to grow Bitcoin holdings.โ
How Bitcoin generates yields
Bitcoin yields have been available in DeFi for years, either through arbitrage or lending. For instance, traders can use cross-exchange spreads or discrepancies in the futures market to generate low-risk arbitrage returns. Still, traders who lend or place their Bitcoin in custody with a third party always run into counterparty risk, as seen in the cases of Celsius or BlockFi.
