Pythagoras' Alpha Long Biased Strategy 3x Bitcoin's 2024 Return, Targeting Corporate and Sovereign Demand This Year

Bitcoin (BTC), the leading cryptocurrency by market value, surged 121% last year to cross the six-figure mark, outshining traditional assets.

Pythagoras Investment Management’s Alpha Long Biased Strategy, designed to amplify returns on bitcoin, achieved an impressive 204% gain in 2024, outpacing the 121% gain clocked by bitcoin and highlighting the fund's ability to generate alpha.

The fund, which combines a bitcoin base position with two uncorrelated strategies, achieved a 3x gain, compared to the 2x return that a typical buy-and-hold bitcoin investor would have realized. The fund charges an incentive fee only when it beats bitcoin's performance.

The fund's three components include a base position in bitcoin for long-term appreciation, a momentum market timing strategy and a long-short market selection strategy. The allocation to each component is adjusted to maximize returns relative to bitcoin.

The Alpha Long Biased Strategy had the smallest fund size among Pythagoras’ four products, with assets under management (AUM) of $7 million. The fund experienced a 2% drawdown in December as BTC slid from record highs above $108,000 to $93,000 at the year-end.

Pythagoras’ Arbitrage strategy delivered a 3% return in December, concluding the year with an 18% gain and $45 million in AUM. The Quant Long Short Fund generated a return of 30% in 2024, with $23 million in AUM and the Absolute Return Strategy generated a 41.7% return, amassing $158 million in client funds. The top asset gatherer of 2024 will be closed for new investors from Feb. 1.

The combined AUM of the four funds increased to over $230 million from $80 million in 2023.

Pythagoras expects the bull market to continue in 2025, fueled by positive regulatory developments in the U.S. and corporate or sovereign demand for bitcoin.