We hope you had an enjoyable Christmas and New Year and spent quality time with family and friends. I promised you some exciting developments in my last newsletter and that detail will follow but first a recap of this very important year in the development of both Digital Assets and our own systematic trading.

Let’s start with the obvious headlines. The Digital Barometer Bitcoin, was down over 5% for the year and down a massive 22% in Q4. For context, Bitcoin was down just over 60% for the whole of 2022, the year everyone talks about as the worst in Crypto history. The difference being in 2022 we had over $35 billion of high profile failures. In Q4 this year, no high profile failures, in fact quite the opposite, some large exchanges were really tested with huge liquidations and in the case of Bybit a massive hack and they all stood up to the challenge, showing the strength of balance sheets and better risk management than previously seen. So that’s a big improvement within the industry. 

However, if we scratch a little further under the surface the Q4 figures are even more staggering. XRP down 35%, ETH down 29%, Sol down 47% and ADA down 56%. For many other coins outside the top 10 it was even greater declines.

So what happened in 2025 that made for such a turbulent market. In simplistic terms Q1 was all about Donald Trump and his tariffs. Never before had the global markets seen events where the entire world trading order was thrown upside down 3 & 4 times by it’s largest trading partner.  Clearly that was important and across all forms of financial trading algorithms struggled predicting the next move of the current US President!

Thankfully he left the markets alone for Q2 & Q3 and if anything became a good friend to crypto, perhaps driven by his family’s “insane” profits from the industry (less said the better)! However, the US passed the Genius Act and in Paul Atkins, as SEC Chairman, found a more willing partner than his predecessor and a better regulatory environment. It also saw Algoz become NFA regulated and both myself and Christina sit and pass our Series 3 exams. For one of us it was their first exam for 40 years!!! Less said the better but I passed. 

Below the surface though, things were changing in Crypto. The institutional adoption of Digital was beginning. Yes, it started to happen in Jan 24 when 11 of the biggest asset managers in the world delivered their BTC ETF’s but that was just a nod to crypto. Later that year those same managers discovered BTC and ETH options and by mid 2025, BTC which had been 62% retail owned as late as Jan 24 was now 65% Institutionally owned and now far more Macro reactive than it had ever been. Now BTC holders were looking at Interest rates, Non Farm payrolls, trading deficits and inflation figures as well as bond coverage and Tradfi Market sentiment, something that Digital retail was hoping would never happen to the Crypto Benchmark, BTC.

There is a great saying, “be careful what you wish for ” and for all those early crypto adopters who wanted tradfi involved in the space, they got it in spades. The problem was it changed the trading dynamic of crypto forever. No longer was the core holder a “buy & hodl” kind of guy or gal, now it was all about “the turn”. Trading cycles quickened in 2025, nostalgia and coin emotion evaporated as analysts from across the globe peered into every piece of coin data out there, looking for the trading edge and the chance to make a quick turn and impress bosses.

And then it happened – just like in the year 2000. For those old enough to remember the collapse of the Dot.com boom, Q4 this year was a condensed digital version of that 2000 event. Of course it has to be condensed because we trade 24 hours a day 7 days a week or 168 continuous hours and back in 2000 we traded just 32.5 hours a week on the Nasdaq. So one quarter is the equivalent of 5 quarters of Nasdaq trading. To explain the similarities and the consequences going forward let me refresh your memory.

At the start of the year 2000, 6.7% of the world were using the internet. At the start of 2025 6.8% of the world owned a Digital coin, the rate of digital adoption continues to mirror the internet and look at that now, more reasons to believe why the Digital genie is well and truly out of the bottle. At the start of 2000 the Nasdaq was at 4186 and by the end of 2000 it was down to 2651 – down a massive 36%. If I take a weighted average of the top ten coins in Q4 as an index that would be down 37%. I could go on with similarities but I guess you see the similar trading dynamic at work here with those two examples. Q4 was our Dot.com crash.

So what happened to bring about this realisation. Well, just like in 2000 in 2025 some of our coins (BTC excluded) started to generate revenues and just like in 2000 institutional investors started to work out the multiples they had paid for their coins and realised in a lot of cases it simply didn’t make sense to keep chasing these valuations or wait for maturity. Their money could be better used in other places. What prompted the start of the sell off was the Binance created clean out on October 10-11, when investors had been asked to believe that a series of wrapped coins were each worth $1 dollar, just like a genuine stablecoin (they werent!). From that moment on and in the absence of any good news stories from the macro environment, investors across the globe questioned valuations and the BTC high of $126,000 in early October retreated to just $88,000 by year end. $1 trillion was wiped off the value of Digital assets in Q4 in a sale that looked and felt just like the year 2000. 

So what happens now? In a bullish theory, this could be a terrific reset. A market down over 30%, many of the highly pumped coins now gone, forever; consolidation around the coins who play an important role in digital development and perhaps a better understanding of value versus price. Maybe. One thing is for certain crypto trading has changed and evolved significantly in 2025 and you need to understand the institutional trading changes to succeed in 2026 and I am delighted to say – we have worked very hard doing just that.

I promised you some exciting news for 2026 and I have that coming up but first an understanding of what we did throughout 2025 as we saw the changing face of Digital Assets. Firstly our AUM now exceeds $250 million and that puts us in the top 10% of Crypto Asset Managers. Thats important. But what are we doing now?

After the choppy trading conditions of Q1 our Head of Investments and Trading, Tom Cohen set our R&D team the task of working out how we could stabilise our strategies and further reduce drawdowns in these choppy trading conditions. We identified that drawdowns were the biggest challenge to new entrants to the crypto space. After 6 months of testing we released a series of upgrades on October 1st that did exactly what we wanted. In both our key strategies we were either close to flat or slightly down across Q4, something that in previous years would have seen us suffering from drawdowns with so many choppy trading patterns. So as illustrated, in the harshest trading conditions we knew our work had succeeded in its primary goals. 

The next challenge Tom set for the team was at the start of Q3 and the hypothesis was, if these trading patterns become “the new trading norm”, it’s great that we have reduced drawdowns but people don’t get into Crypto to break even, they want to make profits. Without compromising our newly incorporated “stabilisers” what does it take to get back to the kind of figures we have enjoyed over the last 6 years of trading and is that still feasible? I am very pleased to report that after 6 months of creation and testing, this month we will be releasing three upgrade components to both our QPMN and AiQP strategies. As stand alones these 3 upgrades performed superbly during Q4 both in testing and with our own prop money in December. We are truly proud of the work done by Benny Ben David, our Head of R&D and his team and we are very excited for the prospects in 2026.

By way of a quick explanation the first strategy upgrade is called RMS – Regime Market Learning Strategy and it simply trades BTC, both long and short, it is low frequency with a low correlation to other current sub strategies. The second is an improvement to our current PTR – Position Trading, this now only trades BTC, ETH, XRP and BNB, it is a long only exposure and selects assets based on a relative value signal; and finally our GDA Strategy, built with a genetic algorithm and showing great alpha in current and past years markets, a strategy designed and built for today’s markets. This trades at 45% of the AUM per day, making it a medium frequency strategy. 

It is for this reason that we are excited about the prospects for 2026 trading. I don’t have final figures for December just yet but I do know that despite a small deficit in December trading, AiQP finished up for the year and so to did QPMN, which against the backdrop of the Barclays Hedge down -14.99% for the year our performance seems OK but not great and we strive for great. 

However, as I said, no one gets into crypto to be small positive for the year and that is why we started working in 2025 to recognise the changing trading conditions and to continue to evolve, just like we have every year since 2019. As the market evolves and matures, so too do our trading algorithms. I mean it when I say that I don’t believe that there is a company in crypto that is as technically developed as Algoz, nor do I believe that there is a smarter team of R&D and trading people in the space. 

Just a couple of things to watch in 2026 – XRP & Canton. Both are doing amazing things in stablecoin payments systems for institutions and look out for the ProMax Gold backed stablecoin, this may prove to be Africa’s binding payment solution saviour. 

From everyone at Algoz we wish you the very best 2026 can offer. I attach a picture of just some of the brilliant people in Algoz – and me, taken in our Head Office recently. From left to right they are : Benny Ben David – Head of R&D, Tom Cohen Head of Investments and Trading, Me in my rightful position at the back, Dajana Krnjic, Head of Ops, Marina Spektor – Head of Compliance and Legal, Kristina Zvyagintseva, Head of the Americas BD, Tal Teperberg CEO & Founder, Yariv Eisenberg, Founder and CTO.