Sygnum’s new ETH market-neutral fund aims to increase investors’ ether holdings rather than their dollar returns. The ETH Alpha Fund SP, designed for professional investors, targets 8% to 10% annually after fees, with every gain and loss measured in ETH.
Key takeaways
- The ETH Alpha Fund SP uses ether as its unit of account.
- Its yield strategy combines staking with arbitrage and derivatives trading.
- Entry requires $100,000 or the equivalent in ETH.
- Monthly withdrawals face notice requirements and an investor-level gate.
An ETH market-neutral fund built around coin holdings
The fund measures performance by changes in ETH holdings, aligning its accounting with investors who plan to own ether for the long term. Its annual return target is denominated in ether, not dollars.
“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,” said Markus Hammerli, Sygnum’s head of asset management and ETH Alpha Fund lead.
That distinction does not remove exposure to ether’s price. Investors can accumulate more ETH while the dollar value of those holdings declines if ether’s price falls.
Staking provides the base, trading adds yield sources
The Sygnum ETH Alpha Fund combines native ETH staking with options premiums, arbitrage across trading venues, and derivatives carry and funding strategies. Staking forms the base layer, with trading strategies added alongside it.
Options selling collects premiums upfront in exchange for accepting payout obligations when prices move sharply. Cross-venue arbitrage seeks to capture price differences between exchanges by buying on the cheaper venue and selling on the more expensive one almost simultaneously.
Funding and carry strategies draw on the perpetual futures market, where leveraged traders make funding payments to one another. A hedged fund can position itself to receive those payments.
The fund’s research materials also identify statistical arbitrage and volatility arbitrage. These model-driven strategies seek returns from pricing discrepancies rather than directional bets.
Custody, entry requirements and withdrawal limits
The ETH Alpha Fund SP uses a Cayman Islands segregated portfolio company structure, with Sygnum Bank acting as custodian. The minimum subscription is $100,000 or its ETH equivalent.
Liquidity is available monthly, subject to notice periods. An investor-level withdrawal gate of up to 10% can restrict how much an individual investor can withdraw at once.
The ETH market-neutral fund follows Sygnum’s Bitcoin-denominated BTC Alpha Fund, launched with Starboard Digital in October 2025. By late January 2026, that vehicle had raised more than 750 BTC, around $65 million, and recorded an annualized return of 8.9% during its first complete quarter.
The BTC fund’s reported performance history extends back to January 2022. The figures show an 18.34% annualized return alongside a 22.57% cumulative return, with volatility of 6.4% annualized and a Sharpe ratio reaching 2.21.
Market neutrality does not eliminate trading losses
Options selling and funding-rate trades retain risks despite the fund’s market-neutral approach. Sudden price spikes can produce losses on sold options after extended periods of premium income.
Funding strategies also respond to changes in leverage. Payments tend to be strongest when leveraged activity is elevated and can diminish as traders’ appetite cools.
Licensed as a bank in Switzerland, Sygnum also maintains regulatory licenses in Singapore and several other jurisdictions.
Read also: Sygnum ETH Alpha Fund targets 8-10% annual returns paid in ETH
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
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