Sygnum has launched the ETH Alpha Fund SP, a market-neutral vehicle open to professional investors. The fund aims for 8% to 10% a year net of fees. The unusual part is the scoreboard: returns are measured in ETH, not dollars. For institutions that already plan to hold ether for years, that changes the question. Instead of asking whether the portfolio rose in dollar terms, they ask whether they own more ether than in January.
Where the ETH return comes from
The fund combines several sources of yield. Native ETH staking is the base layer. On top, Sygnum adds trading strategies such as options premiums, cross-venue arbitrage, and derivatives carry and funding trades. Selling options works like selling insurance. The fund collects a premium upfront and accepts the risk of a payout if prices move sharply. Cross-venue arbitrage tries to capture price gaps between exchanges. Funding and carry trades rely on perpetual futures, where traders pay each other funding fees. Research materials also mention statistical arbitrage and volatility arbitrage. These are model-driven approaches that look for pricing quirks rather than betting on direction.
ETH exposure cuts both ways
Investors still carry full exposure to ether’s price. Every gain and loss lands in ETH. A year that adds 10% more coins can still look bad in dollar terms if ether falls hard. Market-neutral is not the same as risk-free. Options selling can produce steady income for months, then deliver a sharp loss during a sudden price spike. Funding-rate strategies have their own sensitivities. They tend to pay best when traders are using more borrowed money and can shrink when appetite cools.
Structure and the Bitcoin example
The fund is set up as a Cayman Islands segregated portfolio company. Sygnum Bank is custodian. The minimum ticket is $100,000 or the ETH equivalent. Liquidity is monthly with notice periods. There is an investor-level gate of up to 10%, which can limit how much one investor pulls out.
Sygnum has run a similar play before. Its BTC Alpha Fund launched in October 2025 with Starboard Digital. That Bitcoin-denominated vehicle raised more than 750 BTC, around $65 million, by late January 2026. It posted an 8.9% annualized return in its first full quarter. The fund also cites a track record since January 2022: 18.34% annualized, 22.57% cumulative, 6.4% annualized volatility, and a Sharpe ratio of 2.21.
What Sygnum brings
Sygnum is among the earlier digital asset banks, founded around 2017 to 2018. It operates under a Swiss banking license and holds licenses in Singapore and other jurisdictions. Markus Hammerli, who leads asset management and the ETH Alpha Fund, said institutions that hold ETH for the long term increasingly think in ETH and judge the year by whether they end it holding more. The fund is aimed at that mindset.
