Sygnum Launches ETH Alpha Fund Targeting 8–10% Annual Returns Paid in Ether

Sygnum has launched an ether-denominated fund targeting 8% to 10% annually after fees, with every gain and loss measured in ETH rather than dollars. The ETH Alpha Fund SP, built for professional investors, is open now with a minimum subscription of $100,000 or its ETH equivalent.

The structure is a Cayman Islands segregated portfolio company, with Sygnum Bank — licensed in Switzerland, with additional licenses in Singapore and several other jurisdictions — acting as custodian. Liquidity is monthly, subject to notice periods, and an investor-level withdrawal gate of up to 10% can limit how much a single investor pulls out at once.

Why measure returns in ETH?

The design bets that long-term ether holders keep score differently. Markus Hammerli, Sygnum's head of asset management and the fund's lead, said: "Institutions that hold ETH for the long term increasingly think in ETH, not dollars, and judge their year by whether they end it holding more."

That framing has a catch. An investor can end the year holding more ETH while the dollar value of the position falls. Denominating the fund in ether does not remove price exposure. It just changes which number on the statement matters.

What does this change for institutional ETH holders? It gives them a yield product that compounds in the asset they actually intend to keep, rather than forcing them back into dollars each time a distribution lands.

How the yield is built

Native ETH staking forms the base layer. On top of it, the fund layers several trading strategies:

• Options selling — collecting premiums upfront in exchange for accepting payout obligations when prices move sharply.
• Cross-venue arbitrage — buying ether on the cheaper exchange and selling on the more expensive one, near-simultaneously.
• Funding and carry trades — positioning to receive payments from leveraged perpetual futures traders, who pay funding to one another.
• Statistical and volatility arbitrage — model-driven strategies that profit from pricing discrepancies rather than directional bets.

The blend is what "market-neutral" means here: no net bet on ether's direction, with returns sourced from staking yields, premiums and market frictions.

The BTC template

The ETH fund follows a playbook Sygnum has already run. Its BTC Alpha Fund, launched with Starboard Digital in October 2025, had raised more than 750 BTC — roughly $65 million — by late January 2026. It returned 8.9% annualized in its first complete quarter.

The strategy's reported track record, extending back to January 2022 under prior management arrangements, shows an 18.34% annualized return and a 22.57% cumulative return, with annualized volatility of 6.4% and a Sharpe ratio of 2.21.

Market-neutral is not loss-proof

The fund's own risk profile deserves attention. Sold options can generate steady premium income for months, then hand it back in a single violent price spike. Funding-rate income is cyclical too: payments run richest when leveraged trading is hot and thin out when traders de-risk.

In practice, investors are underwriting a specific set of risks — options tails and funding-cycle softness — in exchange for an ether-denominated carry stream. The 10% investor-level gate and monthly notice periods exist precisely because the underlying strategies cannot be unwound instantly.

The launch signals where institutional crypto asset management is heading: single-asset, yield-bearing vehicles denominated in the underlying coin itself. If the BTC Alpha Fund's trajectory holds, expect Sygnum — and its competitors — to keep converting long-term holders' preference for coin accumulation into structured, fee-generating products.