Large Cap Crypto portfolio update: down, but not out


I started a large cap crypto portfolio in September 2021 to see how well it performs with weekly contributions and minimal oversight. The portfolio's 28-coin performance returned 0.93x the total investment on Jan. 16, 2022. The portfolio outperformed a benchmark BTC portfolio under similar conditions by about 10 percent. 

The portfolio's market response successfully muted the cryptocurrency value downtrend the rest of the market experienced since it peaked Nov. 9, 2021 near $3 trillion. The benchmark BTC portfolio with an equivalent DCA schedule is valued at 0.83x its total investment. 

The portfolio's large coin number and several compulsive coin purchases outside the weekly DCA schedule likely reduced the portfolio's performance by several percent. Overall, the experience of running this project and the investment foundation laid over the past four months gives me confidence the portfolio will outperform the market over the next several months. 

Constituent coins

The portfolio initially held 18 cryptocurrencies extracted from the top 100 coins by marketcap. The portfolio added and subtracted several coins to reach its current 28-coin makeup -- PART-3 of this series summarizes my selection process.  The 28 coins, their share of the portfolio's total value, and their performances are tabulated below. 

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Aggregate four-month performance

The portfolio value on Jan. 16, 2022 was $5680, or down $411 from the total deposits. This equates to a seven percent loss in value. Its clear from the black "cumulative deposits" trace that I made several investments outside of the weekly DCA purchases my strategy defines. These purchases were compulsive and often in response to FOMO, aka "fear of missing out". Unfortunately there was no discernible increase in portfolio performance. This observation motivates me to stay disciplined and to act outside my strategy only on rare occasion if there is a very good reason. 

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Benchmark BTC portfolio comparison

The portfolio's value reduction on Jan. 16, 2022 was less steep than a simulated BTC-only portfolio with equivalent weekly DCA purchases. This benchmark BTC portfolio currently returns 0.83x its simulated total deposits compared to the portfolio's 0.93x. 

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Two notes to the reader on this plot:

  • I included the portfolio's BTC component performance in the chart above for comparison. The portfolio's BTC component is 0.78x its total deposit, which is worse than the overall and benchmark portfolios. This is due to some FOMO BTC purchases I made -- definitely a lesson learned! 
  • The benchmark BTC portfolio performance is sensitive to the BTC price history source it uses. For example, my calculation compares well with bitcoindollarcostaverage.com, but poorly with dcabtc.com. I based my calculations on BTC historical market-open data queried from Coinbase Pro's API. It's not clear to me where the two linked websites get their data from, but its a subtlety folks should be aware of if they consider this post in their own crypto research.

 Top-5 performing coins

LUNA, ROSE, RNDR, MATIC, and ATOM led the 28 coin performance on Jan. 16, 2022. RNDR performed particularly well, reaching 5.5x its deposits in late November before settling back to its current 1.72x.

ATOM's performance history offers some motivation to continue investing even when you're in the red. ATOM experienced lukewarm performance for most of the portfolio's four-month history, and even dropped down to about 0.75x in Dec. 2021. The new year has been kind so far to ATOM holders, and my ATOM account is up 1.28x as of writing. 

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Bottom-5 performing coins

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Final thoughts

Overall I'm pleased with both the portfolio's return and with the experience its given me so far. I've certainly grown as an amateur investor because the setup and documentation process forces me to base decisions on data. I've also grown as a software developer by developing my own portfolio tracking software tools. 

Thanks for reading and for any support or constructive criticism you give in the comments. I'll periodically update the Publish0x community on the portfolio's progress through the new year. I also want to start doing deep-dives into each constituent coin as a way to decide which coins to remove -- 28 is too large for my comfort, and I'd like to reduce the count to 20 or below. 

Previous posts in this series:

Thumbnail photo by Michael Förtsch on Unsplash.  

This analysis was completed in Python. View the source code here: https://github.com/simplyrangel/crypto-publish0x, in the 2022-01-post-3 directory. 

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simplyrangel
simplyrangel

Aerospace engineer interested in all things data science and cryptocurrency. Based in Houston, Texas.


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