As the Who famously said “Meet the new boss, same as the old boss” and thats kind of how it felt in January, just like Q4.
Many subscribe to the theory that the “flash crash” of October 10/11 was the start of the big fall in crypto and blame CZ and Binance (for almost anything these days!) but in reality this realignment had been building for some time. BTC was just $49,000 when the first tranche of ETF’s were approved in Jan 24 and it was that rush of “retail”ETF buying that propelled the market way past $100k in the following months and dragged the rest of Crypto with it.
Just 12 months later President Trump, the self-proclaimed “President of Crypto” flattened all financial markets with his tariffs and then rekindled interests, when not for the first time, he rolled back on his tariff pledges and a few other things as well. 2025 was a very introspective and cautious year for crypto, thanks to the President, as we explained in our year end summary but as I write today something more important has just happened at the end of January and not everyone is noticing.
As the BTC price passed through $76,000 down to the low $70,000s all Microstrategy shareholders are now underwater with their investment. The MSTR average price is $76,000. Since August 2020 they have bought nearly $50 billion in Bitcoin and now have no realised profit to speak of. However, MSTR shareholders have got off lightly so far, when compared to Bitmine investors.
Bitmine shareholders are nursing almost $7 billion in losses after buying about $15 billion in ETH with an average at just below $4000 each and that price is down almost 40% from there – ouch, that hurts.
Crypto markets are down almost 11% from the week before, which translates to about $1.7 trillion. That represents a market cap now of $2.6 trillion, down from almost $5 trillion in October.
Bitcoin dominance is still at around 60% and Ethereum at 10%, so not much change there with altcoin markets not disproportionately affected in the downturn.
So where do we go from here? Is this the end of Crypto as some tradfi sceptics would have you believe. Far from it. For those of us who have been around the space for a while you are by now, well familiar with this reset pattern. There is an awful lot of money on the sidelines waiting to get involved who simply look now at a greater value proposition. Is $70K for BTC the bottom? – maybe, maybe not but very soon Crypto, relative to Gold, Silver and certainly the US dollar is going to look very cheap.
There is no doubt that BTC needs a buying catalyst to get back to the strong bid we saw in Jan-Feb 24; sadly the new Fed Chairman doesn’t look like he is going to be that bid driver but in Paul Atkins at the SEC crypto has at least one friend it can rely on. The encouraging trading point is that we have now tested the BTC $73K mark 3 times recently and it has bounced there each time. So have we put a new bottom in place?
For Algoz investors the good news is that all strategies were mildly positive against a backdrop of some serious losses in the asset manager space. Testimony again to the upgrades to strategies that we delivered in October and again in January. We are very much looking forward to the next leg and to capitalise on any clear momentum direction.
The star performer in January was our Momentum strategy, which was up +5.6% net of all fees.
Our AiQP Multi strategy was up +1.6% net and our QPMN Market Neutral up +0.6% net, which given the volatile nature of the month and the many sideways movements that we saw with prices, it was a result that pleased us. Previous choppy trading periods may well have seen losses, so to see the effect of the recent upgrades was very pleasing for the R&D team. (If you would like a copy of our most recent fact sheets just text and it will be sent to you)
A quick reminder that both AiQP and QPMN are available as an SMA and with the added fund structure if you would like or need. Both the funds also custody the assets to avoid exchange counterparty exposure so they do enjoy similar protection to that of our Quant Pro SMA product.
If you are considering your Crypto investment timing I have a sneaky suspicion that now might just be the right time. I certainly know that with recent upgrades to our key strategies we are ready to trade the next leg of this exciting crypto journey and it would be great to meet up for a chat if you have the time.
