Sygnum Crypto Bank Launches Bitcoin Yield Fund Targeting 8–10% Returns

Core Insights - Sygnum has launched the BTC Alpha Fund, allowing investors to earn yield on Bitcoin while maintaining full price exposure, targeting annual returns of 8% to 10% paid in Bitcoin [1][7] Fund Structure and Strategy - The fund is domiciled in the Cayman Islands and is aimed at institutional and professional investors, enabling them to grow their Bitcoin positions by converting trading gains into BTC instead of fiat [2] - The fund employs arbitrage trading strategies to achieve its targeted returns, appealing to long-term Bitcoin holders who wish to maintain their exposure while generating yield [3][7] Market Context and Potential - There is a growing interest in Bitcoin-based income strategies, with the fund providing an institutional-grade entry into Bitcoin DeFi, a largely untapped segment, as only 0.8% of Bitcoin's supply is currently deployed in DeFi [4] - Franklin Templeton Digital Assets has estimated that the Bitcoin yield opportunity could reach $1 trillion, indicating significant market potential [4] Practical Benefits - The fund allows shares to be pledged as collateral for USD Lombard loans through Sygnum, providing liquidity options without the need to sell BTC-based assets [5] - It features monthly liquidity and a defined risk management framework to help investors navigate crypto market volatility [5] Management and Infrastructure - The fund is managed by Starboard Digital, known for its trading and risk management expertise, while Sygnum provides the regulated banking and distribution infrastructure [6] - This partnership aims to address the challenge of generating yield on Bitcoin while maintaining exposure to its appreciation potential, offering one of the few institutional-grade solutions in the market [6]