<\/p>\n
Swiss digital asset bank Sygnum is launching a fund to help investors maximize their Bitcoin yield while retaining price exposure.<\/p>\n
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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.<\/p>\n
\n\u201cBitcoin has become a key exposure in modern portfolios, and many of our clients want to stay invested while building their positions further,\u201d said Markus H\u00e4mmerli, who is leading the BTC Alpha Fund offering at Sygnum. \u201cThe BTC Alpha Fund helps investors participate in Bitcoin\u2019s price performance while aiming to earn additional Bitcoin through trading returns, all within an institutional-grade framework.\u201d<\/p>\n<\/blockquote>\n
BTC Alpha Fund, domiciled in the Cayman Islands, will target 8\u201310% 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.<\/p>\n
\n\u201cGenerating yield on Bitcoin while maintaining exposure to its appreciation potential has been a key challenge for institutional investors,\u201d said Nikolas Skarlatos of Starboard Digital. \u201cOur partnership with Sygnum delivers one of the few high-quality institutional setups available to grow Bitcoin holdings.\u201d<\/p>\n<\/blockquote>\n
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How Bitcoin generates yields<\/h2>\n
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.<\/p>\n
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