Swiss digital asset bank Sygnum has announced the launch of its latest investment product, the BTC Alpha Fund, designed to enhance yield generation on Bitcoin while maintaining investors’ exposure to its price fluctuations. This new initiative is in collaboration with Athens-based firm Starboard Digital and promises to provide attractive annual net returns of 8% to 10%, payable directly in Bitcoin.
Situated in the Cayman Islands, the BTC Alpha Fund targets professional and institutional investors keen on exploring yield-generating strategies beyond mere Bitcoin preservation. By leveraging arbitrage strategies, the fund aims to convert trading profits into Bitcoin, enabling participants to accumulate more coins while simultaneously benefiting from Bitcoin’s long-term appreciation potential.
“Bitcoin has become a key exposure in modern portfolios, and many of our clients want to stay invested while building their positions further,” stated Markus Hämmerli, the head of the BTC Alpha Fund initiative at Sygnum. The launch of this fund comes at a time when institutional investors are increasingly seeking ways to utilize decentralized finance (DeFi) platforms to maximize returns on their Bitcoin holdings.
The growing interest in Bitcoin-based DeFi has not gone unnoticed. A recent report from Binance Research highlighted the fact that merely 0.8% of the total Bitcoin supply is currently being utilized in DeFi applications, indicating a vast “untapped opportunity” within the sector. Julian Love, a deal analyst at Franklin Templeton Digital Assets, expressed that the potential value of this opportunity could reach as high as $1 trillion.
For investors, another appealing aspect of the BTC Alpha Fund is the ability to use shares in the fund as collateral for U.S. dollar Lombard loans through Sygnum. This arrangement enables long-term Bitcoin holders to access liquidity for additional investments while retaining their cryptocurrency holdings.
The BTC Alpha Fund is designed to allow for monthly liquidity and operates under a stringent risk management framework, providing the necessary flexibility to navigate the inherent volatility of the digital asset market. The partnership with Starboard Digital brings valuable expertise in trading and risk management to the table, further enhancing the fund’s operational robustness.
Sygnum’s introduction of the BTC Alpha Fund marks a significant step in its ongoing efforts to expand its Bitcoin-related offerings. Since launching various initiatives last year, the firm has been actively working to bridge the gap between traditional finance and the evolving cryptocurrency landscape, positioning itself as a frontrunner in the regulated digital asset space.
As institutional demand for sophisticated investment vehicles continues to rise, the BTC Alpha Fund is poised to deliver innovative solutions that cater to the specific needs of professional investors, further solidifying Sygnum’s reputation as a leader in the digital asset banking sector.
