Bitcoin Traders Eye $109K as Trump Anticipation Builds, BTC ETFs Rake in Nearly $1B

Bitcoin , the leading cryptocurrency by market value, surged 121% last year to cross the six-figure mark, outshining traditional assets. However, this performance falls short in comparison to Pythagoras Investment Management’s Alpha Long Biased Strategy, which pushed the envelope even further.

The fund, which combines a BTC base position with two uncorrelated strategies, achieved an impressive return of 204% in 2024, Pythagoras said in an email to CoinDesk. That equates to a 3x gain, significantly outpacing the 2x return a typical buy-and-hold bitcoin investor would have realized. The fund charges incentive fee only when it beats bitcoin's performance.

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

The momentum strategy employs machine learning and pattern recognition to adjust and optimize exposure dynamically, allowing it to capture short-term market fluctuations. Meanwhile, the long-short strategy utilizes a proprietary AI-based forecasting model to create a dollar-neutral portfolio, making long investments in tokens expected to yield superior returns while shorting those anticipated to underperform.

The allocation to the three components is calibrated to maximize returns relative to bitcoin.

Despite its performance, the Alpha Long Biased Strategy was Pythagoras' smallest fund, boasting assets under management (AUM) of $7 million. It suffered a 2% drawdown in December as the year-end saw BTC climb down from record highs above $108,000 to $93,000.

Meanwhile, Pythagoras' Arbitrage strategy delivered a 3% return in December, ending 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, gathering $158 million in client funds. Pythagoras said that the top asset gatherer of 2024 will be closed for new investors from Feb. 1.

The combined AUM of the four funds grew to over $230 million from $80 million in 2023 as the bull market revved up investor confidence.

Bullish outlook

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

"The incoming Trump administration, with its proposal on creating a national strategic Bitcoin reserve and appointing individuals favorable to our industry in key Executive Branch positions, is expected to be a major catalyst. With over 290 members of Congress who are pro-crypto, we anticipate that supportive legislation for the cryptocurrency industry will gain momentum," Mitchell Dong, CEO of Pythagoras, said in a note to CoinDesk.

"As the U.S. Congress explores the idea of a national strategic Bitcoin reserve, we expect some countries to attempt to front-run the U.S. in accumulating Bitcoin, should this initiative come to fruition," Dong added, mentioning the possibility of listed companies following MicroStrategy's lead in adopting BTC.

US Bitcoin miner Riot Platforms has announced its Bitcoin production and operation updates for December.

The company said it mined 516 Bitcoin in December, an increase of 4% from November’s 495 Bitcoin.

Riot Platforms’ December Updates

Riot’s increased Bitcoin output comes amid ongoing efforts to expand its mining infrastructure, particularly with the development of its Corsicana Facility. In December, Riot completed the first 400 MW of its Corsicana facility in Texas, marking a significant milestone in the company’s expansion plans.

Despite all systems now being operational, Riot is taking a careful, phased approach to commissioning the facility.

While Bitcoin production increased in December compared to November, it went down 17% year over year. In December 2023, the company mined a total of 619 Bitcoin. The average Bitcoin produced per day also went down from 20 in 2023 to 16.5 in 2024.

As of the end of 2024, Riot Platforms said it owned 17,722 BTC, a 141% increase from December 2023.

This growth in Bitcoin holdings can be attributed to Riot’s strategic BTC purchases. It has also impacted the company’s shareholder value, with a 39% increase in Bitcoin yield per fully diluted share.

In December alone, Riot has made multiple Bitcoin purchases. According to information made public on December 12, Riot acquired 5,117 Bitcoin for $510 million. Later in the month, the company announced that it had purchased another 667 Bitcoin worth $69 million at an average price of $101,135 per BTC.

Riot is not alone in its Bitcoin purchases; companies like Marathon Digital and MicroStrategy have also made similar acquisitions. The Bitcoin miner also announced plans to raise $500 million through a private offering of convertible senior notes due in 2030 to purchase more Bitcoin.

The company’s shares were up nearly 5% following the announcement, trading at $12.88.

Separately, earlier in 2024, Riot secured a 9.25% stake in Canadian miner Bitfarms in a strategic move to maintain economic viability following the Bitcoin halving.

Another key factor contributing to Riot’s growth is the massive 155% surge in its hash rate in 2024. This critical metric reflects the company’s ability to mine Bitcoin efficiently. The network’s hash rate increased by 52% over the same period.

A Canadian volunteer moderator of a crypto forum has reportedly gone into hiding with his family after kidnappers allegedly attempted to abduct him and force him to give up his Bitcoin. 

The victim, who wasn’t named in Canadian French language news outlet La Presse’s Jan. 6 report, claims he saw the accused prepare a violent attack before he and his children managed to escape.

“It’s incredible violence,” the man told La Presse.

The latest incident comes amid a rising number of cases of robberies, kidnappings and muggings involving cryptocurrencies over the last year. 

The man said he and his children have been moving from one Airbnb to the next to hide their whereabouts and said police concluded their motive was to steal funds from his crypto wallet.

"[The perpetrators] would have seen posts on a Facebook page that I’ve been moderating for several years and thought I had 2.5 million Bitcoin,” the man told La Presse. 

The man first made a denunciation to the police on Nov. 4 after two men wearing surgical masks threatened him outside his home. However, the pair fled after he managed to close the door on them.

Then, on Nov. 8, while putting his daughter in the back of the car, he spotted a black car without a license plate hiding near his home in the bushes. He was followed while driving and on the phone to police and had a gun pointed at him soon after when he pulled over.

Four people were arrested, and two of them were brought into the Victoriaville courthouse last November after being accused of conspiring to kidnap and possessing prohibited firearms.

The alleged assailants were released pending trial, scheduled for March, but remain under house arrest, where they cannot leave unless for legitimate work, La Presse noted.

The victim didn’t appear to be happy with the Court of Quebec’s decision to release the suspects on bail as he has been forced to “burn the few savings” he has left to continue evading his suspected kidnappers.

Bitcoin cypherpunk Jameson Lopp has tracked at least 181 reports involving crypto robberies, kidnappings, murders or related incidents since December 2014 — which include a few recent incidents that occurred over this past holiday period.

On New Year’s Day, French police rescued a man found tied up in the trunk of a car in Le Mans on Jan. 1 after his captors made a ransom demand to his son, a crypto influencer living in Dubai.

On Christmas Day, a Pakistan-based crypto trader was reportedly kidnapped by several men in a police van and was forced to transfer $340,000 while held at gunpoint.

On Dec. 24, the wife of another crypto influencer was reportedly kidnapped by three men, with a police chase leading to a car crash in Belgium.

Lopp previously recommended against peer-to-peer trades — particularly with people you don’t trust — flaunting wealth on social media and wearing crypto-branded clothing.

U.S. prosecutors, who have filed criminal charges against former Terraform Labs CEO Do Kwon, estimate that the collapse of TerraUSD and Luna cryptocurrency potentially affected more than one million victims.

“While it is difficult to precisely quantify the number of Kwon’s victims … the Government estimates that the number of victims in this case exceeds hundreds of thousands of individuals and entities, and potentially totals more than one million,” Acting US Attorney Daniel Gitner wrote in a court filing submitted on Monday.

In the alleged crypto fraud scheme, prosecutors claimed that Kwon built the Terra ecosystem on “lies” and “manipulative and deceptive” techniques to deceive investors into believing it was a functioning and reliable financial system. 

“Ultimately, investors suffered over $40 billion in losses as a result of Kwon’s fraud,” the filing said.

Due to the number of potential victims, U.S. prosecutors said it is “impracticable” to send individualized notice to each victim informing them of their rights. Instead, prosecutors have requested the court to post a public notice of the proceedings online.

Kwon faces multiple criminal charges in the U.S., the destination of his extradition from Montenegro last week. His charges include commodities fraud, securities fraud, wire fraud, money laundering conspiracy, among others. If convicted of all charges, Kwon could face a maximum penalty of 130 years in prison.

In a New York court last week, Kwon pleaded not guilty to his criminal charges. His next court appearance is set for Jan. 8, according to Reuters.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Ethereum price extended its increase above the $3,650 zone. ETH is consolidating and aims for a fresh increase above the $3,750 resistance.

• Ethereum started a decent recovery wave above the $3,700 zone.
• The price is trading above $3,650 and the 100-hourly Simple Moving Average.
• There is a connecting bullish trend line forming with support at $3,660 on the hourly chart of ETH/USD (data feed via Kraken).
• The pair could continue to rise if it clears the $3,750 resistance level.

Ethereum Price Climbs Above $3,700

Ethereum price remained stable above the $3,550 level and extended its upward move like Bitcoin. ETH gained pace for a move above the $3,620 and $3,650 resistance levels.

The bulls were able to surpass the $3,700 resistance level. It opened the doors for a move toward the $3,750 level. A high was formed at $3,742 and the price is now consolidating gains. There was a minor decline below the 23.6% Fib retracement level of the upward move from the $3,593 swing low to the $3,742 high.

Ethereum price is now trading above $3,660 and the 100-hourly Simple Moving Average. There is also a connecting bullish trend line forming with support at $3,660 on the hourly chart of ETH/USD. The trend line is close to the 50% Fib retracement level of the upward move from the $3,593 swing low to the $3,742 high.

On the upside, the price seems to be facing hurdles near the $3,710 level. The first major resistance is near the $3,750 level. The main resistance is now forming near $3,780. A clear move above the $3,780 resistance might send the price toward the $3,850 resistance.

An upside break above the $3,850 resistance might call for more gains in the coming sessions. In the stated case, Ether could rise toward the $3,920 resistance zone or even $4,000 in the near term.

Another Decline In ETH?

If Ethereum fails to clear the $3,750 resistance, it could start another decline. Initial support on the downside is near the $3,660 level and the trend line. The first major support sits near the $3,620.

A clear move below the $3,620 support might push the price toward the $3,550 support. Any more losses might send the price toward the $3,500 support level in the near term. The next key support sits at $3,420.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is gaining momentum in the bullish zone.

Hourly RSI – The RSI for ETH/USD is now above the 50 zone.

Major Support Level – $3,660

Major Resistance Level – $3,750

MicroStrategy, the major enterprise software company that has evolved into a Bitcoin (BTC) investment platform, has captured attention once again with its latest purchase of $101 million in BTC.

The company, led by chairman and co-founder Michael Saylor, has committed to utilizing perpetual preferred stock, common shares, and debt to fuel its ongoing Bitcoin purchasing strategy.

MicroStrategy Eyes $42 Billion Capital Raise By 2027

In a filing with the US Securities and Exchange Commission (SEC), MicroStrategy disclosed that it purchased 1,070 Bitcoin tokens at an average price of approximately $94,000 on December 30 and 31, 2024. 

This brings the company’s total Bitcoin holdings to an impressive 447,470 BTC, acquired for around $27.97 billion at an average price of $62,503 per Bitcoin. 

Notably, Saylor highlighted in a social media post on X (formerly Twitter), that the company achieved a Bitcoin yield of 48% for the fourth quarter of 2024 and 74.3% for the entire fiscal year.

MicroStrategy’s ambitious plans extend beyond Bitcoin acquisitions. On Friday, the firm announced its intention to raise up to $2 billion through offerings of perpetual preferred stock, which will hold seniority over its Class A common stock. 

This move is part of a larger strategy to raise $42 billion in capital by 2027 through various means, including at-the-market stock sales and convertible debt offerings. With more than two-thirds of its equity goals already met, the company is expected to pivot towards fixed-income markets in the near future.

The demand for MicroStrategy’s stock (MSTR) has notably increased among hedge funds, which are employing convertible arbitrage strategies that involve purchasing bonds and short-selling shares. 

This strategy capitalizes on the volatility of MicroStrategy’s stock, a characteristic that has become a cornerstone of its business model. Benchmark analyst Mark Palmer remarked:

MicroStrategy’s recent proposal to increase the number of authorized shares of Class A common stock from 330 million to 10.3 billion has sparked fears of share dilution, leading to a significant drop in the company’s stock price. 

MicroStrategy’s Bold Bitcoin Strategy Faces Headwinds 

On the day of the proxy filing in December, shares fell by as much as 9.6%. Adam Kobeissi, founder of The Kobeissi Letter, noted the dilemma faced by investors, stating: 

A vote on the share increase is scheduled for January 21, 2025, and with Saylor being a significant shareholder, the amendment is expected to pass. Should it be approved, the increase in shares could lead to further volatility in MicroStrategy’s stock price as the company becomes more leveraged. 

Although the company has typically outperformed Bitcoin, it has faced challenges in recent months, underlining that its performance is influenced by factors beyond just cryptocurrency prices.

Despite the recent fluctuations, Palmer maintains a “buy” rating on MicroStrategy’s stock. He believes the market’s reaction to the proposed share increase has been an overreaction. 

“The company’s strategy has been to issue shares to make accretive Bitcoin purchases which can accrue to the benefit of shareholders,” he commented.

MicroStrategy’s aggressive approach to Bitcoin acquisitions has seen it make significant purchases exceeding $1 billion in late 2024, although recent weeks have seen a slowdown in these activities amidst fluctuating Bitcoin prices. 

Palmer reassured investors, stating, “We’ve seen a pull forward of the company’s strategy, which is not indicative of a slowdown… it’s more a reflection of the aggressive approach that the company has taken.”

At the time of writing, the market’s leading crypto is inching closer to the $100,000 milestone, trading at $99,340, up 2% in the last 24 hours.

Featured image from DALL-E, chart from TradingView.com