Switzerland’s Sygnum launches BTC Alpha fund, targeting 8-10% Bitcoin yield

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.

BTC Alpha Fund, domiciled in the Cayman Islands, will target 8–10% 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.

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.