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Month Twenty-Nine – UP 459%
After a very strong April, the 2019 Top Ten was handed its first all-red month since September 2020. Although it narrowed the gap a bit this month, the 2019 portfolio is still the second best performing of the four, trailing the first place 2020 Top Ten Portfolio. Despite a rough May, the portfolio is up +459% since January 2019.
May Movement Report, Ranking, and Dropouts
Here are the May ups and downs for the 2019 Top Ten Portfolio:
- EOS – up three places (#26–>#23)
- Tether – up two places (#5–>#3)
- BSV – down six places (#28–>#34)
- Tron – down four places (#20–>#24)
- Litecoin – down three places (#11–>#14)
- XRP – down three places (#4–>#7)
- Bitcoin Cash – down three places and out of the Top Ten (#10–>#13)
Top Ten dropouts since January 2019: After twenty-nine months, 60% of the cryptos that started in the Top Ten in January 2019 have been pushed out. EOS, Litecoin, BSV, Stellar, Bitcoin Cash, and Tron have been replaced by Binance Coin, Doge, Cardano, UNI, USDC, and Polkadot.
BSV is the only one of the 2019 Top Ten cryptos that have dropped out of the Top Thirty.
May Winners and Losers
May Winners – For the first time in a long time, Tether. Second place goes to EOS, which finished the month down just -3%.
May Losers – BSV was pummeled this month, losing nearly half of its value, down -46%. Tron is the second worst performer of May, down -41%.
Tally of Monthly Winners and Losers
Which crypto holds the most wins or losses over the life of the project? Here’s a snapshot of the winners and losers over the first twenty-nine months of the 2019 Top Ten Experiment:
Tether still has the greatest number of monthly victories (8) followed by BTC with five. In other words, 28% of the time (eight times out of twenty nine months) every crypto in the 2019 Top Ten Portfolio has finished the month in the red.
While every crypto has won at least one month since January 2019, EOS is the only crypto without a monthly loss in the 2019 Top Ten Experiment.
Overall Update – ETH has doubled BTC returns, all cryptos well in the green, BSV worst performing
Even though it fell -10% in May, Ethereum pulled further ahead of second place BTC this month. ETH’s ROI is more than double that of Bitcoin since the beginning of the 2019 Experiment.
And that $100 investment into first place ETH on January 1st, 2019? It’s currently worth $1,976.
After twenty-nine months, 100% of the cryptos in the 2019 Top Ten Portfolio are in positive territory. Not counting stablecoin Tether, the worst performing crypto is BSV, which is still up +85%. Compare that to the ROI of the S&P (more on that below).
Although the 2019 Top Ten Portfolio is up an impressive +459%, it is still second place behind the best performing of the four Experiments: the 2020 Top Ten is up +630%.
Total Market Cap for the Entire Cryptocurrency Sector:
The entire cryptocurrency sector is up +1190% since January 2019. That’s still well behind first place ETH (+1,826%) but much better than the rest of the cryptos (including second place Bitcoin’s +873%) and much better than the Top Ten approach.
After reaching $2T last month, the total market cap lost $570 billion in May. The seven month streak of month-ending total market cap record highs was broken this month as the total market cap returned to a level last seen in March.
BitDom continued to drop in May, setting another low point in the 2019 Top Ten Index Fund Experiment. For context, the table above shows the progression over the last twenty-nine months with BTC domination ranging between 42%-70%.
If you’re curious as to what happened last time Bitcoin Dominance fell into the low 40s and 30s, check out the 2018 Top Ten Experiment.
Overall return on $1,000 investment since January 1st, 2019:
The 2019 Top Ten Cryptos Portfolio lost $1933 in May. After twenty-nine months the value of the initial $1000 investment is $5,594, up +459%. This breaks a six month streak of record returns for the 2019 Portfolio and the ROI has dropped back to where it was in March 2021.
Here’s a table summarizing the monthly ROI over the life of the 2019 Top Ten Index Fund experiment, which provides a pretty good sense of the journey to this point:
Almost completely green, but there have been some very significant dips. For example, a little over one year ago the 2019 Top Ten Portfolio was returning only +6%.
Combining the 2018, 2019, 2020, and 2021 Top Ten Crypto Portfolios
Speaking of other Top Ten Portfolios, let’s put them all together now:
- 2018 Top Ten Experiment: up +26% (total value $1,264)
- 2019 Top Ten Experiment: up +459% (total value $5,594)
- 2020 Top Ten Experiment: up +630% (total value $7,300)
- 2021 Top Ten Experiment: up +281% (total value $3,809)
Taking the four portfolios together, here’s the bottom bottom bottom bottom line:
After a $4,000 investment in the 2018, 2019, 2020, and 2021 Top Ten Cryptocurrencies, the combined portfolios are worth $17,967 ($1,264 + $5,594 + $7,300 + $3,809).
That’s up +349% on the combined portfolio. It’s a big drop from last month, but looking at the big picture, the combined portfolios are back to where they were two months ago in March.
Here’s a table to help visualize the progress of the combined portfolios:
In summary: That’s an +349% gain by investing $1k on whichever cryptos happened to be in the Top Ten on January 1st for four straight years.
Top Ten Index vs. Top Five Index
Inspired by a suggestion from one of our blog readers, let’s take a look at how the 2019 Top Ten approach would compare to a hypothetical Top Five Index.
A Top Five 2019 Index would mean investing $200 into BTC, XRP, ETH, BCH, and EOS.
After twenty-nine months, a Top Five Index would be worth $7,852, returning 685%. That’s compared to the $5,594 (+459%) of the 2019 Top Ten.
Once again, it is very clear that going with the five largest caps on January 1st, 2019 would have been the much better approach.
Alright, that’s crypto. How does crypto compare to the stock market?
Comparison to S&P 500:
I’m also tracking the S&P 500 as part of the experiments to have a comparison point with traditional markets. Although only adding 1% in May, it was enough for another all time high for the S&P:
Since the S&P 500 Index is up 68% since January 2019, the initial $1k investment I put into crypto a little over two years ago would be worth $1,680 had it been redirected to the S&P 500 in January 2019.
Even though an extremely solid return for traditional markets, that +67% return is nearly four hundred percentage points behind the return of the 2019 Top Ten Portfolio over the same time period.
But what if I took the same world’s-slowest-dollar-cost-averaging $1,000-per-year-on-January-1st-Crypto-Index-Fund-Experiment approach with the S&P 500? It would yield the following:
- $1000 investment in S&P 500 on January 1st, 2018 = $1570 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1680 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1300 today
- $1000 investment in S&P 500 on January 1st, 2021 = $1120 today
Taken together, here’s the bottom bottom bottom bottom line for a similar approach with the S&P:
After four $1,000 investments into an S&P 500 index fund in January 2018, 2019, 2020, and 2021, my portfolio would be worth $5,670 ($1,570 + $1,680 + $1,300 + $1,120)
That is up +42% since January 2018 compared to a +349% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of 307% in favor of crypto.
Here’s a table providing an overview of the four year ROI comparison between a Top Ten Crypto approach and the S&P:
That’s an eight month streak and a 307% lead for crypto, about the same as a few months ago in March.
Despite its first all red month since September 2020, the 2019 Top Ten continues to produce impressive returns. Stepping back and taking a long-term view on crypto is helpful, especially in down months. Have we topped out for this cycle? No one knows, but we should all have a better idea of where we are in the coming months. Buckle up.
To both old-timers and newcomers: thanks so much for taking the time to read and for supporting the Top Ten Crypto Index Fund Experiments. I hope you find the updates helpful in terms of perspective as you navigate this strange and exciting crypto landscape.
Feel free to reach out with any questions and stay tuned for progress reports. Keep an eye out for my parallel projects tracking the Top Ten cryptos as of January 1st, 2018 (the OG experiment), January 1st, 2020, and most recently, January 1st, 2021.
If crypto is causing you to lose sleep at night, chances are you have too much in crypto: try to think long term, don’t invest what you can’t afford to lose, buckle up, and enjoy the ride.
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