Key Highlights
- Capital Raised: Over 750 Bitcoin (BTC) secured from professional and institutional investors in four months.
- Institutional Interest: 68% of institutional investors have invested or plan to invest in Bitcoin products.
- Strategy & Access: Market-neutral arbitrage fund; units can be used as collateral for USD loans without selling bitcoin.
Sygnum, a Swiss digital asset bank, and Starboard Digital, a crypto investment firm, have raised over 750 Bitcoin (BTC) for a new fund that focuses on arbitrage trading, as institutional investors look for ways to earn returns from crypto without relying only on price increases.
The fund, called the BTC Alpha Fund, was launched in October 2025 and has drawn capital from professional and institutional investors over the past four months. According to figures shared by the firms, it delivered an annualized return of 8.9% in Bitcoin terms during the fourth quarter of 2025.
Instead of betting on whether Bitcoin’s price will go up, the fund follows market-neutral strategies. It focuses on exploiting price differences across crypto markets, especially between spot and derivatives, making profits from these gaps rather than from changes in BTC’s price.
Shift in institutional approach
The fund is launching at a time when institutional interest in digital assets is shifting. With spot Bitcoin exchange-traded funds (ETFs) making it easier for big investors to get exposure, and price volatility lower than in earlier cycles, simple long-only strategies are becoming less appealing.
Because of this, some investors are now looking at approaches similar to traditional hedge funds, such as market-neutral and relative-value strategies, which aim to generate returns under a variety of market conditions.
Sygnum provides the banking and custody infrastructure for the fund, while Starboard Digital is responsible for managing the trading strategy.
Markus Hämmerli, who leads the BTC Alpha Fund at Sygnum, said the product was developed in response to this shift in investor behavior.
“As Bitcoin becomes a core portfolio allocation for institutional investors, we’re seeing growing demand for strategies that can generate returns beyond simple price appreciation. The fund’s Q4 performance demonstrates that professional Bitcoin management can deliver meaningful results even when spot markets are flat or declining.”
How the strategy works
The BTC Alpha Fund is domiciled in the Cayman Islands and uses systematic arbitrage strategies across major crypto trading venues. These include price differences between spot and derivatives markets, as well as short-term inefficiencies that arise across exchanges.
The fund does not bet on whether Bitcoin’s price will go up or down. It is designed to stay market-neutral, earning returns mainly through trading activity that does not depend on overall market movements. Any profits are added back into Bitcoin rather than being converted to fiat.
To manage risk, the fund uses position limits, liquidity checks, and focuses on markets with high trading volumes. It offers monthly liquidity to investors and keeps its assets stored off-exchange.
Role of Sygnum and Starboard
Sygnum acts as the banking and infrastructure provider, offering custody and financing services linked to the fund. Starboard Digital manages execution and portfolio construction.
One feature of the structure is that fund units can be used as collateral for US dollar–denominated Lombard loans through Sygnum, allowing investors to access liquidity without selling their Bitcoin exposure.
Nikolas Skarlatos of Starboard Digital said the fund was built to address a long-standing challenge in institutional crypto investing. “Generating yield on Bitcoin while maintaining exposure to its long-term upside has been a persistent challenge for institutional investors. The early performance of the fund points to growing acceptance of yield-focused strategies, with a target range of 8–10% annual returns across different market conditions.”
Broader market context
The fund is launching at a time when crypto markets are growing more mature, with deeper liquidity and stronger infrastructure that make more complex investment strategies possible.
At the same time, arbitrage strategies depend on gaps in the market, which can narrow as more money flows in. How well the fund performs also depends on execution, the depth of the markets it trades in, and how risks are handled during volatile periods. Data from the industry suggests that demand for professionally managed Bitcoin products is growing. Around 68% of institutional investors have either already invested in, or plan to invest in, Bitcoin exchange-traded products (ETPs) or related instruments, reflecting the growing appetite for structured crypto strategies beyond simple spot exposure.
Even so, the scale of capital raised in a relatively short period suggests that institutional investors are becoming more comfortable allocating to structured crypto products that go beyond simple price exposure.
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