Periodic Table of Monthly Crypto Returns

Periodic Table of Monthly Crypto Returns


Hi friends-

I'm sure most of you have seen periodic table like representations of asset class returns.   I'm sure one exists for crypto returns but I couldn't find it so I built one for a dozen of the largest coins (excluding stable coins and BNB) that updates automatically (hopefully reducing the chance for errors).   I've used a data source I believe can be trusted but I can make no guarantees so please do your own research.   I'll send it out via twitter more often than I'll post it here so if you're interested, you can see more frequent updates there.  This kind of view into returns is always interesting to me as it can unlock some unique insights.  More on this written below the table below.

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 As a whole, the asset class has been pretty incredible as you can see from the averages at the bottom of the table.   You can also see that the dispersion in returns between the top and bottom performers of this group of "large caps" is enormous .   That means selecting the right coins is critical if you want to achieve superior returns.  How does one do that though when there are thousands of options to focus on with so little time?

One of the things I like to do is to create tools that help me narrow my focus on a handful of candidates to conduct more research on.  There are many ways to do this but one of my favorites is to create what I call a zero-sum alpha framework.  I'll explain.

Taking the coins above, I compare the returns of each of the coins to the average of all the other coins.  Doing this forces a zero sum view where there are coins that are winning relative to the pool and coins that are losing relative to the pool.  When I see coins that are starting to pull away, that is an early signal that maybe the market knows something that I'm not aware of and I should start doing my research.

Below I'm pasting the graphs of the coins above in this view (excluding BTC and ETH) into two groups.   The alpha harvesters and the alpha donors.

Alpha harvesters

The upward trend means they are out performing the average of the other coins.  Beware though, the trend could change at any time and they could start to underperform.   Of the three of these, AVAX looks like a good candidate to do additional research on as it seems early in its outperformance.  Please don't take that as a recommendation to buy it. 

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Alpha donors

In a zero sum framework, for every winner you have there has to be a loser.  That's why I call them alpha donors.  Below are the donors of the pool represented by the periodic table.  This does not mean they have lost money.  It simply means they have underperformed relative to the average of the pool.   Of course, things can change at any time.   If I see an upward trend emerge from any of these, it will be an early indication that I should spend some more time on their fundamentals as they may be on the verge of outperforming. 

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Hope this is helpful and as always, this is not investment advice.  I'm simply trying to educate and give the community ideas to explore that may or may not be helpful to your investing efforts. 

Cheers,

NZFX

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NZFX
NZFX

Pursuing interesting conversations that help lead to truth. Twitter: @NZFX6


From skeptic to hodlr to investor
From skeptic to hodlr to investor

A 20 year institutional investor learning about the crypto space.

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