To learn about the history and the rules of the Experiments here.
This article contains affiliate links. If you click on a link in this article, I may earn a small commission at no extra cost to you.
Join BlockFi and put your crypto to work for you! Don't miss out on 8.6% APY and up to a $250 in crypto bonus.
Considering getting into cryptocurrencies?
Be prepared for a wild ride.
In fact, I recommend getting your financial house in order first.
Month Twenty Four and Two Year Report – UP 169%
First things first, Happy New Year!
To mix things up a bit for year end, I'm going to release the Top Ten Crypto Index Fund Experiment Reports in highest-return order. First up, the best performing of the Experiments, the 2019 Top Ten! Okay, go!
Another head spinning month for crypto. While not as uniformly green as November, the 2019 Top Ten Cryptos seemed to be constantly in the headlines, especially Bitcoin’s rise and XRP’s descent. Thanks mainly to the gains of BTC, ETH, and LTC, the 2019 Top Ten Portfolio gained in value, even though many cryptos had substantial losses. The 2019 Portfolio continues to be the strongest performer of the three Top Ten Crypto Index Fund Experiments.
With this month’s update, we wrap up two years of tracking this group of cryptos! Bitcoin, XRP, Ethereum, Bitcoin Cash, EOS, Stellar, Tether, Litecoin, BSV, and Tron.
Based on feedback I’ve had while reporting on the 2019 Top Ten Portfolio over the past two years, there’s not a lot of middle ground with many of these cryptos: you either love ‘em or you hate ‘em. And there are passionate people on both sides who always seem to wanna be startin’ somethin’
Regardless of how we might feel about these individual cryptos today, as a group they represent the leaders of the cryptoverse in terms of market cap on January 1st, 2019.
And the 2019 Top Ten Portfolio’s return of +169% makes it the best performing of the three, at this point in the Experiments anyway.
Two years later, here’s the final count(down): only one crypto (XRP) is in the red. Two are flat, one by performance, one by design (EOS and Tether). Four cryptos have seen triple digit price growth led by Bitcoin, up a jaw dropping +678% since January 1st, 2019.
The portfolio’s +169% return outperformed seven of the individual component cryptos contained within the Index while crushing the S&P 500’s +50% returns over the same time period.
Not a bad twenty four months for the 2019 Top Ten Portfolio.
Question of the Month Year:
When in 2020 did the Bitcoin Halving occur?
A) May 11th
B) April 20th
C) May 4th
D) February 14th
Scroll down for the answer.
December Ranking and Two Year Movement Report
For such a strong month overall (thanks, BTC and LTC), there was a lot of downward movement with the 2019 Top Ten in December. Only Tether was able to pick up a place in the ranking, swapping #4 for #3 with SEC charged XRP on its way down. BCH and BSV fell one spot to #6 and #12 respectively. EOS fell three places to #16 and both Stellar (#15) and Tron (#19) lost four places each, the biggest falls of December.
Top Ten dropouts since January 2019: After two years of the 2019 Top Ten Experiment 40% of the cryptos that started in the Top Ten have dropped out. EOS, Stellar, BSV, and Tron have been replaced by Binance Coin, Chainlink, Cardano, and Polkadot.
Of note, although there are different players involved, this is the same percentage (60%) of position holders as the 2018 Top Ten Portfolio. The 2020 Top Ten Experiment group has performed only marginally better with 70% remaining and 30% dropping out this year.
Which held and which lost the most ground compared to its peers? Twenty four months in, Tether has made the most upward movement. It started the Experiment two years ago at #7 has climbed four positions to #3. Litecoin has also climbed an impressive three spots moving from #8 to #5 (after a brief detour out of the Top Ten). Bitcoin has been the most steady crypto, always well in first position.
Beginning 2019 in 5th place, EOS has dropped the most in the last two years (eleven positions) ending 2020 at #16. Tron and Stellar have each fallen nine positions in twenty four months. Tron’s final 2020 ranking of #19 places it in danger of becoming the first 2019 Top Ten crypto to fall out of the Top Twenty.
December Winners and Losers
December Winners – Three of the most well-known cryptos dominated this month, carrying the rest of the 2019 Top Ten Portfolio: Bitcoin gained +51%, Litecoin +44%, and Ethereum +21%.
December Losers – Another well-known crypto had its worst month of the two-year long 2019 Top Ten Index Fund Experiment: XRP fell a staggering -63%. Stellar struggled as well, losing 1/3rd of its value this month.
Two Year Tally of Monthly Winners and Losers
After two years, here’s a snapshot of the winners and losers over the first twenty four months of the 2019 Top Ten Experiment.
Stablecoin Tether has far and away the greatest number of monthly victories (7), which basically tells us that there have been seven out of twenty four months (29% of the time) where every crypto in the 2019 Top Ten Portfolio finished in the red. Other than USDT, it’s been a three way tie between BTC, ETH, and BSV, each with three wins.
BSV, although up a healthy +75% overall, leads the loss column with nine losses out of the twenty four months (i.e. BitcoinSV has lost 38% of the time). Tether has the second most losses (6) which shows there were six months where every crypto in the list was in the green. BTC and EOS are the only two cryptos without a monthly loss compared to their Top Ten peers after two years. XRP was in that list as well, until this month.
Two Year Wrap Up – BTC, ETH, and LTC lead the way, 2019 Top Ten is up +169% and best performing of the Experiments, and XRP in last place.
After two years of tracking this group of cryptos, we see some familiar names in front: BTC is up +678%, ETH is up +439%, and Litecoin is up +310%. All with solid triple digit gains.
Bitcoin is especially impressive: the initial $100 investment in BTC is currently worth $793.
And after two years, the only crypto not flat or in positive territory is XRP, down -32%. Then comes EOS which has essentially broken even, up only +2%.
Total Market Cap for the Entire Cryptocurrency Sector:
Since January 2019, the total market cap for crypto is up a massive +509%. The cryptocurrency market added $193B in December to the $182B it gained in November. The total market cap is now over the three quarters of a trillion mark. Unbelievable gain in just a few months.
For the third straight month, crypto is at its highest month-end level since the 2019 Top Ten Experiment began two years ago.
After stabilizing a bit over the last few months, BitDom skyrocketed in December, ending 2020 at 70.4%.
You’d have to go back to the ninth month of the 2019 Top Ten Experiment (September 2019) to see an equivalent level (70.5%). The table above shows the progression over the last twenty four months with BTC domination ranging between 50%-70% since the beginning of the experiment.
Overall return on $1,000 investment since January 1st, 2019:
The 2019 Top Ten Crypto Portfolio gained $261 in December. Two years in, the value of the initial $1000 investment is now $2,693.
And here’s a two-year look at the ROI over the life of the 2019 Top Ten Index Fund experiment so far, month by month:
Unlike the completely red table you’ll see in the 2018 Top Ten Experiment, the 2019 crypto table is almost all green. The first month was the lowest point (-9%) and the high point is…now. The previous high point? Last month.
As mentioned, at +169%, the 2019 Top Ten Portfolio is still the best performing out of the three Experiments. The gap has widened to 30 percentage points over the second place 2020 Top Ten Portfolio, which is up +139%. This is the widest difference of the year.
Combining the 2018, 2019, and 2020 Top Ten Crypto Portfolios
Speaking of the other Experiments, let’s take a look at how the 2019 Top Ten Index Fund Portfolio compare to the parallel projects:
- 2018 Top Ten Experiment: down -49% (total value $513)
- 2020 Top Ten Experiment: up +139% (total value $2,395)
Taking the three portfolios together, here’s the bottom bottom bottom line:
After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, my combined portfolios are worth $5,601 ($513+ $2,693 +$2,395).
That’s up about +87% on the three combined portfolios, compared to +72% last month.
Here’s a table to help visualize the progress of the combined portfolios:
To sum up: +87% gain by dropping $1k once a year on whichever cryptos happened to be in the Top Ten on January 1st, 2018, 2019, and 2020.
Top Ten Index Approach vs. All-In Approach
But what if I’d gone all in on only one Top Ten crypto for the past three years? While many have come and gone over the life of the experiment, only five cryptos have remained in the Top Ten for all three years: BTC, ETH, XRP, BCH, and LTC. So let’s take a look at those five:
Although ETH would have been your best bet as of last month, BTC’s strong December has allowed it to retake the lead. Three consecutive $1k investments into Bitcoin January 1st 2018, 2019, and 2020 would have returned an extremely impressive +358%. You’d be up +310% If it was ETH you put your money into, and Litecoin +162%.
Taking the same investment strategy with XRP? You would have you down nearly a third on that initial investment, -31%, the worst bet of the five. BCH comes in the green at +31%, not bad, but falls well short of BTC, ETH, and LTC. And the stock market, as measured by the S&P 500 (more on that below).
And the Top Ten Index Fund approach?
It definitely misses out on the sky high returns that focusing on BTC or ETH (or even LTC) would bring, but it does seem to have hedged against the losses and underperformance of putting all your eggs in XRP or BCH’s baskets. As might be expected, the +87% gains of the combined Top Ten Index Funds represent a bit of a middle ground.
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. The S&P 500 once again hit a new all time high in December 2020 and is now up 50% since January 2019.
The initial $1k investment I put into crypto two years ago would be worth $1,500 had it been redirected to the S&P 500 in January 2019.
+50% is a very solid return, way above what investment advisors say to expect (about 8%/year).
But still nowhere near the +169% return of the 2019 Top Ten Portfolio over the same time period.
That’s the 2019 Top Ten. But what if I took the same world’s-slowest-dollar-cost-averaging $1,000-per-year-on-January-1st crypto approach with the S&P 500? It would yield the following:
- $1000 investment in S&P 500 on January 1st, 2018 = $1410 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1500 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1160 today
Taken together, here’s the bottom bottom bottom line for a similar approach with the S&P:
After three $1,000 investments into an S&P 500 index fund in January 2018, 2019, and 2020, my portfolio would be worth $4,070.
That is up +36% since January 2018 compared to a +87% gain of the combined Top Ten Crypto Experiment Portfolios.
You can also compare against five individual coins (BTC, ETH, XRP, BCH, and LTC) by using the table above if you want.
That’s a 51% difference in favor of crypto, the widest gap all year. That’s now seven monthly victories for the S&P vs. five monthly victories for crypto, all clustered in the second half of the year.
Final Thoughts After Two Years:
Ah, the 2019 Top Ten: it has been interesting to see this motley crew composed of some of the most controversial (or even hated) projects emerge as the highest performing of the Three Top Ten Crypto Experiments. In fairness, much of the 2019 Top Ten’s success boils down to the gains on Bitcoin’s rock bottom Jan. 2019 price, so it will be interesting to see if the 2019 Portfolio can maintain its front runner status.
Regardless, the +169% return of this 2019 Top Ten Portfolio in just two years is impressive. Especially when compared to the +50% of the S&P, it is extremely satisfying.
But it hasn’t been easy. In the middle (or start?) of a massive crypto bull run, it’s tempting to pat ourselves on the backs about our genius (or guts) to buy crypto in early 2019 and hold for the last two years. But for anyone actually on the journey, it’s been tough sometimes. Early 2019 were dark days for crypto, most projects were in free fall with little hope that they’d get back to their 2017 highs. Some still haven’t. Buying more sometimes felt like throwing good money after bad.
But, here we are. For those who have held on, I congratulate you. For those just getting into crypto, I hope these reports can somehow help you see the highs and lows of what you might be in for. Buckle up, think long term, don’t invest what you can’t afford to lose, and most importantly, enjoy the ride!
Thanks and the Future of the Experiments
Thanks for reading and for supporting the Top Ten Crypto Index Fund Experiments over the years! I’ve continually tried to improve these reports over the years and will continue to do so. Now that I have four concurrent Top Ten Portfolios to track (plus a possible stablecoin interest spinoff) I may have to figure out creative ways to share the information.
Overall, it’s been a blast interacting with everyone, especially beginners – feel free to reach out if you have any questions.
As for the future of the experiments? Full steam ahead.
- I’ll continue to hold and report monthly on the Top Ten Cryptos of 2018.
- I’ll continue to hold and report monthly on the Top Ten Cryptos of 2019.
- I’ll continue to hold and report monthly on the Top Ten Cryptos of 2020.
- And, just announced, yes, I repeated the experiment with the Top Ten Cryptos of 2021!
All the best in your crypto adventures in 2021!
And the Answer is…
A) May 11th
Designed to control inflation, the once every four year Bitcoin halving took place on May 11th.
Follow me on Twitter here:
Help keep the lights on at the Top Ten Crypto Index Fund Experiments.