Pythagoras Alpha Long Biased Strategy Surpasses Bitcoin’s 2024 Gains with 204% Return
Bitcoin (BTC), the world’s largest cryptocurrency by market value, delivered an impressive 121% gain in 2024, surpassing most traditional assets. Yet, this stellar performance was eclipsed by Pythagoras Investment Management’s Alpha Long Biased Strategy, which achieved a remarkable 204% return over the same period.
The fund combines a core BTC position with two distinct, uncorrelated strategies: a momentum-based market timing approach and a long-short market selection strategy. This innovative blend enabled the fund to outperform a standard buy-and-hold Bitcoin investment, which would have yielded roughly a 2x return. Notably, Pythagoras charges performance fees only when the fund surpasses Bitcoin’s benchmark gains.
At its core, the fund maintains exposure to Bitcoin’s long-term appreciation potential. The momentum market timing strategy leverages machine learning and pattern recognition to dynamically adjust exposure, capitalizing on short-term price swings. Simultaneously, the long-short market selection strategy uses a proprietary AI-driven forecasting model to construct a dollar-neutral portfolio, strategically going long on high-potential tokens while shorting underperformers.
These three components are carefully balanced to optimize returns relative to Bitcoin’s performance.
Despite its standout results, the Alpha Long Biased Strategy remains Pythagoras’ smallest fund, managing $7 million in assets. The fund experienced a modest 2% drawdown in December as Bitcoin retraced from its record highs above $108,000 to settle around $93,000.
Pythagoras’ other strategies also delivered notable performances in 2024. The Arbitrage Strategy posted a 3% return in December and closed the year with an 18% gain on $45 million in assets under management (AUM). The Quant Long-Short Fund recorded a 30% annual return with $23 million in AUM, while the Absolute Return Strategy achieved a robust 41.7% gain, attracting $158 million in client capital. Pythagoras has announced plans to close its top-performing fund to new investors starting February 1.
The combined assets under management across all four funds surged from $80 million in 2023 to over $230 million by the end of 2024, reflecting heightened investor confidence amid the ongoing bull market.
A Bullish Outlook for 2025
Pythagoras anticipates further bullish momentum in 2025, driven by favorable regulatory developments in the U.S. and growing institutional and sovereign demand for Bitcoin.
“The incoming Trump administration, with its plans for a national strategic Bitcoin reserve and the appointment of pro-crypto officials in key government positions, is expected to be a significant catalyst,” said Mitchell Dong, CEO of Pythagoras, in a note to CoinDesk.
Dong also highlighted the growing pro-crypto sentiment in the U.S. Congress, with over 290 members expressing support for the industry. “We expect some nations may attempt to preemptively accumulate Bitcoin ahead of U.S. initiatives, and publicly listed companies might follow MicroStrategy’s lead in adding Bitcoin to their treasuries,” Dong added.
With these factors in play, Pythagoras remains optimistic about sustained growth and increasing institutional adoption of Bitcoin in the coming year.
