The Pythagorean long-biased cryptocurrency strategy generated a 204% return in 2024, outperforming Bitcoin (BTC).

Bitcoin (BTC), the leading cryptocurrency by market cap, rose 121% last year to surpass the six-figure mark, outperforming traditional assets. However, this performance is lower compared to the long alpha-biased strategy developed by Pythagoras Investment Management, which prompted further progress.

The fund, which combines a BTC core position with two unrelated strategies, generated an impressive 204% return in 2024, Pythagoras said in an email to CoinDesk. This equates to a 3x profit, which significantly exceeds the 2x return an investor would have made. Typical Bitcoin buy and hold. The fund only charges incentive fees when it outperforms Bitcoin.

The fund’s primary position in Bitcoin provides direct exposure to long-term appreciation, and the two uncorrelated strategies – the momentum market timing strategy and the long-short market selection strategy – generate alpha.

The momentum strategy uses machine learning and pattern recognition to dynamically adjust and optimize supply, allowing it to capture short-term market fluctuations. Meanwhile, the long-short strategy uses a proprietary AI-based forecasting model to create a dollar-neutral portfolio, resulting in long investments in tokens that are expected to deliver superior returns while minimizing those that are expected to underperform.

The allocation to the three components is calibrated to maximize returns compared to Bitcoin.

Despite its performance, the Alpha Long Biased strategy was the smallest of the Pythagoras funds, with assets under management (AUM) of $7 million. It suffered a 2% decline in December as the end of the year saw BTC fall from record levels above $108,000 to $93,000.

Meanwhile, the Pythagorean arbitrage strategy generated a 3% return in December, ending the year with an 18% gain and $45 million in assets under management. The Quant Long Short Fund generated a 30% return in 2024, with $23 million in assets under management and the absolute return strategy generated a 41.7% return, raising $158 million in client money. The largest asset pool for 2024 will be closed to new investors from February 1, Pythagoras said.

The four funds’ combined AUM grew to more than $230 million from $80 million in 2023 as a bull market increased investor confidence.

Bullish outlook

Pythagoras expects the bull market to continue this year, driven by positive regulatory developments in the US and sovereign and corporate demand for Bitcoin.

“The incoming Trump administration, with its proposal to create a National Strategic Reserve for Bitcoin and appoint pro-industry individuals to key positions in the executive branch, is expected to be a major catalyst. With more than 290 members of Congress pro-cryptocurrencies, we will continue to support cryptocurrencies,” said Mitchell Dong, President “We expect that legislation supporting the cryptocurrency industry will gain momentum,” Pythagoras CEO, in a note to CoinDesk.

“As the US Congress explores the idea of ​​establishing a national strategic reserve for Bitcoin, we expect that some countries will try to outpace the United States in Bitcoin accumulation, if this initiative comes to fruition,” Dong added, indicating the possibility of listed companies following MicroStrategy’s plan. Leading BTC adoption.