Kosta Ouzas says most quant funds like Jim Simons' Medallion Fund rely on mean reversion, but Bitcoin follows a power law instead. His system uses that power law structure as its foundation, not the assumption that prices bounce back to an average.
January 2, 2026.
Roughly 66% annualized returns.
Most quantitative trading strategies rely on mean reversion, the idea that price eventually is going to return to an average. This approach made Jim Simons one of the most successful traders of all time, earning roughly 66% annualized returns through the Medanion Fund. But Bitcoin is not a normal financial market, and Bitcoin doesn't reserve to some kind of flat mean over long periods of time. Bitcoin follows what's called a power law, and on a log log chart, this looks like a straight line, and this is driven by adoption and network effects. So treating Bitcoin like a normal asset is actually a mistake. And that's why, instead of mean reversion, my system uses power law support as its structural reference point.
