Sygnum Launches BTC Alpha Fund to Boost Bitcoin Yields for Institutional Investors

Swiss digital asset bank Sygnum has introduced the BTC Alpha Fund, a new investment vehicle designed to generate consistent yield on Bitcoin while preserving exposure to its price appreciation. Developed in partnership with Athens-based Starboard Digital, the fund leverages arbitrage strategies to target annual net returns of 8–10%, with payouts made directly in Bitcoin.

The fund is domiciled in the Cayman Islands and is tailored to professional and institutional investors. By reinvesting arbitrage profits into Bitcoin, participants can increase their BTC holdings without missing out on the cryptocurrency’s long-term growth potential. According to Sygnum, demand from clients seeking institutional-grade yield products in digital assets has already been strong.

This move comes as institutional players increasingly look beyond simply holding Bitcoin to more advanced strategies that use decentralized finance (DeFi) to boost returns. Despite growing interest, only about 0.8% of Bitcoin’s supply is currently deployed in DeFi, according to Binance research. Analysts, including Franklin Templeton’s Julian Love, estimate that the market opportunity for Bitcoin DeFi could reach $1 trillion.

Markus Hämmerli, who is leading the BTC Alpha Fund initiative at Sygnum, emphasized Bitcoin’s role as a core asset in modern portfolios, noting that many clients want to expand their positions while generating additional yield.

The BTC Alpha Fund also offers practical benefits for investors. Fund shares can be pledged as collateral for USD Lombard loans at Sygnum, enabling long-term Bitcoin holders to unlock liquidity without liquidating their crypto assets. With monthly liquidity and a strict risk management framework, the fund aims to provide stability while navigating digital asset volatility.

This launch further strengthens Sygnum’s growing suite of regulated Bitcoin investment products, bridging the gap between traditional finance and the digital economy. The collaboration with Starboard Digital combines institutional trading expertise with robust risk controls, making the BTC Alpha Fund a notable development for professional Bitcoin investors.