Key Insights

• The Alpha Long Biased Strategy from Pythagoras Investment Management achieved a 204% return last year, compared to Bitcoin's 121% increase.
• The fund manager anticipates a continuation of the bullish market trend into 2025.

Overview

Bitcoin (BTC) saw a significant rise of 121% last year, pushing it beyond the six-figure threshold, outpacing traditional assets. However, this increase is modest compared to the Pythagoras Alpha Long Biased Strategy's impressive 204% return in 2024. Pythagoras manages to achieve this through a combination of a base position in Bitcoin and two uncorrelated strategies.

The fund operates by combining direct exposure to Bitcoin with both a momentum market timing strategy and a long-short selection strategy, aimed at generating alpha.

Performance and Strategy

The momentum strategy utilizes machine learning to optimize exposure, capturing short-term market fluctuations. The long-short selection employs a proprietary AI forecasting model for portfolio management, balancing long investments in strong-performing tokens against short positions in those perceived to underperform.

Despite this stellar performance, the Alpha Long Biased Strategy is Pythagoras's smallest fund, with an AUM of $7 million, and it experienced a 2% drawdown in December as Bitcoin's price corrected from peak levels.

Market Outlook

Pythagoras is optimistic about the ongoing bull market, driven by positive regulatory news in the U.S. and increasing corporate demand for Bitcoin. "The incoming Trump administration's proposal for a strategic national Bitcoin reserve is expected to be a significant catalyst," said Mitchell Dong. The landscape presents a chance for other countries to accumulate Bitcoin ahead of U.S. initiatives.

Learn more about Pythagoras Investment Management for insights on alternative investment strategies in cryptocurrency.