Swiss digital-asset bank Sygnum has launched a new Ethereum-focused fund that aims to give professional investors a way to grow their ETH balances faster than traditional staking. The Sygnum ETH Alpha Fund SP, which opened to investors on November 2, targets an annual return of 8–10% denominated and paid in ETH (after fees) by combining native staking with trading and derivatives strategies. What the fund does - Base income comes from native Ethereum staking (Sygnum estimates conventional staking currently yields roughly 2–3% annually). - That staking income is augmented by active strategies: selling options to collect premiums, arbitrage across trading venues, and generating income from funding rates and other derivatives positions. - The firm describes these approaches as market-neutral because they are designed to produce returns that do not rely primarily on ETH price appreciation. However, because the fund’s performance is measured in ETH, investors remain exposed to dollar-value swings in the token. Structure, eligibility and mechanics - The fund measures gains and losses in ETH and pays out in ETH. The 8–10% figure is an investment objective, not a guarantee. - It is aimed at qualified and professional investors in approved markets, including Switzerland. - Minimum investment: $100,000 (or equivalent in ETH). - Subscriptions occur monthly with two business days’ notice; redemptions require 15 calendar days’ notice. The fund-level investor redemption gate can be up to 10% of investor-level redemptions. Risk and custody - Key risks include derivatives exposure, staking-specific risks, liquidity, counterparty and trading-system risks; some strategies may use leverage, which can magnify losses in volatile markets. - The fund uses Sygnum Protect, the bank’s off-exchange custody service, so collateral remains with Sygnum while managers execute trades on supported venues. That arrangement is intended to reduce the amount of client collateral held directly on exchanges, but it does not eliminate trading or counterparty risk. - Sygnum expanded Sygnum Protect in March 2025 to add derivatives exchange Deribit; the bank has also been named as a custody partner in institutional off-exchange trading arrangements by other platforms such as Bitget. Context and strategy rationale Markus Hämmerli, head of asset management and the fund’s lead, said institutional ETH holders are increasingly “thinking in ETH, not dollars.” The ETH Alpha Fund is built for investors who want to increase their token holdings without selling existing positions—by turning staking income into a larger ETH-denominated yield through active trading overlays. Sygnum’s ETH product follows a similar Bitcoin vehicle. In October 2025 the bank launched the BTC Alpha Fund (in partnership with Starboard Digital), which targets 8–10% annual returns in BTC after fees using a mix of BTC exposure and arbitrage strategies. Why it matters The ETH Alpha Fund highlights a broader institutional push to convert passive crypto exposure into higher token-denominated yields while keeping assets in custody with regulated providers. For investors who prioritize accumulating tokens rather than dollar returns, these kinds of market-neutral, yield-enhancing products offer an alternative to simple staking—albeit with additional complexity and risk. Read more AI-generated news on: https://app.chaingpt.org/news