Pythagoras Alpha Long Biased Strategy Outperforms Bitcoin’s 121% Surge with 204% Return in 2024
Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, soared 121% in 2024, surpassing traditional asset classes. Yet, Pythagoras Investment Management’s Alpha Long Biased Strategy delivered an even more impressive 204% return, significantly outpacing the gains of a standard buy-and-hold Bitcoin strategy.
The fund’s performance highlights its innovative approach, combining a core BTC position with two uncorrelated strategies to maximize returns while minimizing downside risks. Pythagoras’ Alpha Long Biased Strategy charges performance fees only when it exceeds Bitcoin’s returns, aligning incentives with investors.
Breaking Down the Strategy
The fund’s structure consists of:
- Base Bitcoin Position – Provides long-term exposure to BTC’s appreciation potential.
- Momentum Market Timing Strategy – Uses machine learning and pattern recognition to dynamically optimize exposure, capturing short-term price fluctuations.
- Long-Short Market Selection Strategy – Deploys an AI-driven model to build a dollar-neutral portfolio, going long on tokens expected to outperform and short on those likely to underperform.
This balanced allocation allows the fund to generate alpha by leveraging Bitcoin’s growth while actively managing volatility.
2024 Performance Highlights
Despite its standout performance, the Alpha Long Biased Strategy remained Pythagoras’ smallest fund, managing $7 million in assets under management (AUM). It experienced a 2% drawdown in December, as Bitcoin retraced from record highs of over $108,000 to $93,000.
Other Pythagoras funds also posted strong results:
- Arbitrage Strategy – Returned 3% in December, ending the year up 18% with $45 million in AUM.
- Quant Long Short Fund – Delivered a 30% return, managing $23 million in AUM.
- Absolute Return Strategy – Gained 41.7%, attracting $158 million in client assets.
Pythagoras closed the year with a combined AUM of over $230 million, up from $80 million in 2023, reflecting heightened investor confidence amid the ongoing crypto bull market.
Bull Market Outlook for 2025
Pythagoras remains optimistic about the continuation of the bull market in 2025, citing positive regulatory developments and growing institutional demand for Bitcoin.
CEO Mitchell Dong highlighted expectations for favorable policy shifts under the incoming Trump administration, including discussions around a national strategic Bitcoin reserve and the appointment of pro-crypto officials in key government positions.
“With over 290 pro-crypto members in Congress, we foresee momentum building for legislation that supports the cryptocurrency sector,” Dong stated.
He also emphasized the potential for sovereign nations to preemptively accumulate Bitcoin if the U.S. pursues this reserve strategy. Additionally, Dong expects more publicly listed companies to follow MicroStrategy’s lead in integrating Bitcoin into their balance sheets.
Positioned for Growth
Pythagoras Investment Management’s standout performance, driven by AI-powered strategies and disciplined risk management, underscores its ability to outperform the broader crypto market. As regulatory clarity improves and institutional adoption accelerates, the firm expects continued growth and robust returns in 2025 and beyond.
