Swiss bank Sygnum launches Bitcoin fund targeting 8-10% annual yield

Swiss crypto bank Sygnum has launched the Sygnum BTC Alpha Fund in partnership with Athens-based Starboard Digital, aiming to deliver annual returns between 8% and 10% through arbitrage trading strategies. Unlike conventional yield products, returns will be paid directly in Bitcoin rather than fiat currency.

The fund is domiciled in the Cayman Islands and tailored to institutional and professional investors. Its structure allows participants to increase their Bitcoin positions by compounding gains into BTC, offering an alternative to selling or reallocating holdings.

Markus Hämmerli, Head of the BTC Alpha Fund at Sygnum, explained the motivation:

“Bitcoin has become a key exposure in modern portfolios, and many of our clients want to stay invested while building their positions further.” — Markus Hämmerli, Sygnum

The launch reflects a growing demand among asset managers and family offices for BTC yield strategies that preserve long-term exposure while addressing volatility.

Why the Sygnum BTC Alpha Fund matters for bitcoin yield

The Sygnum BTC Alpha Fund is one of the first institutional-grade products designed to capture Bitcoin yield while maintaining exposure to price appreciation. According to Binance Research, only 0.8% of Bitcoin’s total supply is currently deployed in DeFi protocols, leaving significant room for growth in BTC-based income opportunities.

Meanwhile, Franklin Templeton Digital Assets has estimated that Bitcoin yield strategies could represent a $1 trillion market over the next decade.

Nikolas Skarlatos, Partner at Starboard Digital, emphasized the need for such structures:

“Generating yield on Bitcoin while maintaining exposure to its appreciation potential has been a key challenge for institutional investors. This partnership offers one of the few institutional-grade solutions in the space.” — Nikolas Skarlatos, Starboard Digital

For crypto investors, the Sygnum BTC Alpha Fund may serve as a low-friction bridge into Bitcoin DeFi, providing liquidity and returns without forcing a trade-off between yield and exposure.

Features and structure of the fund

The Sygnum BTC Alpha Fund offers several mechanisms to mitigate risk and enhance flexibility for investors:

• Arbitrage trading strategies managed by Starboard Digital, focusing on exploiting price differences across global exchanges.
• Monthly liquidity options, allowing investors to enter or exit positions with predictable timing.
• Collateralized loans, as shares in the fund can be pledged for USD Lombard loans via Sygnum, enabling participants to unlock liquidity without liquidating Bitcoin holdings.
• Defined risk management framework, designed to reduce volatility and provide transparency to institutional stakeholders.

Sygnum will provide regulated banking and distribution infrastructure, while Starmark serves as the alternative investment fund manager (AIFM). The combined setup strengthens compliance, custody, and investor protections.

The bank says the fund’s appeal lies in enabling clients to “earn in Bitcoin, stay in Bitcoin,” a proposition not widely available in traditional finance.

Expanding beyond bitcoin: Sygnum’s Sui integration

While the Sygnum BTC Alpha Fund focuses on Bitcoin yield, Sygnum continues to expand into broader blockchain ecosystems. In August 2025, the bank announced new services for the Sui blockchain, including custody, trading, staking, and SUI-backed lending for institutional clients.

The move builds on Sygnum’s earlier July 2025 integration of SUI and reflects growing institutional interest in high-performance blockchains. The offering includes off-balance sheet asset structuring to safeguard client funds even in the event of bankruptcy.

By targeting asset managers, banks, and high-net-worth individuals, Sygnum is positioning itself as a full-spectrum digital asset bank with exposure across BTC, ETH, SOL, XRP, and SUI.

The expansion also deepens its collaboration with the Sui Foundation, which aims to promote institutional adoption of decentralized applications in finance, gaming, and tokenization.

Institutional demand meets crypto infrastructure

For institutional investors, the Sygnum BTC Alpha Fund represents both a practical yield tool and a step toward legitimizing Bitcoin’s role in traditional portfolios. With regulatory compliance, risk-managed structures, and liquidity access, Sygnum is attempting to lower the barriers that have historically limited institutional participation in crypto yield strategies.

The launch also highlights how demand for Bitcoin products is shifting from simple exposure to income-generating solutions. Analysts argue that this evolution mirrors traditional finance, where yield opportunities such as bonds and dividend-paying equities are integral to portfolio construction.

As the fund rolls out, its success could influence whether other banks and asset managers follow suit in building regulated Bitcoin yield products.

Conclusion

The Sygnum BTC Alpha Fund blends arbitrage trading expertise from Starboard Digital with Sygnum’s regulated banking infrastructure to deliver institutional-grade Bitcoin yield. Offering 8–10% annual returns paid in BTC, the fund seeks to attract long-term holders who want to grow their positions without exiting the market.

As crypto adoption broadens, the Sygnum BTC Alpha Fund underscores a new stage in institutional engagement: yield generation anchored in Bitcoin, supported by risk management and regulatory clarity.