“This Crypto Fund Easily Outshined Bitcoin’s 121% Surge in 2024.”

The Pythagoras Alpha Long Biased Strategy offers a unique approach to cryptocurrency investment, combining a base position in Bitcoin (BTC) with two uncorrelated strategies, designed to outperform traditional buy-and-hold methods.

Bitcoin, the largest cryptocurrency by market cap, saw a 121% rise in 2024, surpassing the six-figure mark. However, this impressive performance still lagged behind the results of Pythagoras Investment Management’s Alpha Long Biased Strategy, which delivered a remarkable 204% return during the same period.

According to Pythagoras, the fund achieved a 3x gain in 2024, far surpassing the 2x return that an average buy-and-hold Bitcoin investor would have seen. The fund’s incentive fee is only triggered if it outperforms Bitcoin itself. This strategy blends direct exposure to Bitcoin with two distinct, uncorrelated approaches: a momentum market timing strategy and a long-short market selection strategy, both of which are designed to generate alpha.

The momentum strategy utilizes machine learning and pattern recognition to adjust exposure dynamically, capturing short-term market fluctuations. The long-short strategy, on the other hand, employs an AI-powered forecasting model to create a dollar-neutral portfolio. This model invests long in tokens with high return potential while shorting those expected to underperform.

The allocation between the three components is carefully calibrated to maximize returns relative to Bitcoin.

Despite its standout performance, the Alpha Long Biased Strategy remains Pythagoras’ smallest fund, with assets under management (AUM) totaling $7 million. It did experience a 2% drawdown in December as Bitcoin’s price fell from a peak above $108,000 to $93,000 by year-end.

In contrast, Pythagoras’ Arbitrage Strategy returned 3% in December, concluding the year with an 18% gain and $45 million in AUM. The Quant Long Short Fund delivered a 30% return in 2024, managing $23 million, while the Absolute Return Strategy yielded an impressive 41.7% return with $158 million in client assets. Pythagoras also noted that the Absolute Return Strategy will be closed to new investors starting February 1, 2025.

The total AUM of Pythagoras’ four funds grew substantially, reaching over $230 million by the end of 2024, up from $80 million the previous year, as the bull market sparked increased investor confidence.

Looking ahead, Pythagoras remains bullish on the cryptocurrency market, predicting continued growth driven by favorable regulatory developments in the U.S. and rising corporate demand for Bitcoin. Mitchell Dong, CEO of Pythagoras, noted that the incoming Trump administration’s proposal for a national strategic Bitcoin reserve, coupled with the appointment of crypto-friendly figures in key government positions, could serve as a significant catalyst for the industry. Dong also highlighted that, with over 290 pro-crypto members of Congress, there is optimism that supportive legislation will continue to gain traction.

As the U.S. considers the creation of a national Bitcoin reserve, Dong speculated that other nations might attempt to front-run the U.S. by accumulating Bitcoin in anticipation. Additionally, he pointed to the possibility of more listed companies following MicroStrategy’s example in adopting Bitcoin as part of their treasury strategy.