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Considering getting into cryptocurrencies? Be prepared for a wild ride.
In fact, I recommend getting your financial house in order first.
Month Fifteen – UP 589%
While not quite as crazy as February, March was another extremely strong month for the 2020 Top Ten Portfolio. All cryptos had solid two-digit gains led by EOS and Tezos and the 2020 Top Ten further solidified its position as the best performing of the four Top Ten Experiments.
100% of this group is in the green overall, all have at least triple digit price growth with two crypos in four digit growth territory.
The +589% return of the Top Ten Index approach has outperformed seven of the individual component cryptos contained within the Index. It has also absolutely dwarfed the returns of the S&P 500 over the same period of time.
March Ranking, Movement Report, and Dropouts
70% of the cryptos in the 2020 Top Ten moved this month and most of them lost ground:
- BNB – up one place (#4→#3)
- Tether – up one place (#5→#4)
- BSV – down six places last month, down six places this month (#23→#29)
- BCH – down three places (#11→#14)
- EOS – down two places (#22→#24)
- XTZ – down two places, and out of the Top Thirty (#29→#31)
- LTC – down one place (#8→#9)
Top Ten dropouts since January 2020: in just over one year, 40% of the cryptos that started in the Top Ten have dropped out: EOS, BSV, Tezos, and most recently BCH have been replaced by Chainlink, Cardano, Polkadot, and UNI.
EOS and BSV are out of the Top Twenty. And XTZ’s current #31 rank places it out of the Top Thirty.
March Winners and Losers
March Winners – EOS (+47%) followed by Tezos (+42%). Also of note, all cryptos (or the non-stablecoins at least) finished the month with double digit gains, something that hasn’t happened in a while.
March Losers – Besides USDT, Bitcoin Cash had the weakest performance of the month (but still finished up +15%).
Tally of Monthly Winners and Losers
After fifteen months, here’s a snapshot of the 2020 Top Ten Experiment’s monthly winners and losers:
EOS’s March win didn’t change anything overall: with four monthly victories, ETH has doubled the wins of the tied for second place BTC, USDT, BNB, and Tezos. With yet another Tether loss this month (always nice to see), it has the most losses: seven out of fifteen months (nearly 47%).
Overall Update – BNB best performer of any crypto in any Top Ten Experiment, 100% of cryptos in triple digit positive territory, worst performer (EOS) still up +117%.
Welcome to the best performing Experiment of the four, by far. The 2020 Top Ten are on fire right now and a few things sets this group apart from the other Top Ten Crypto Experiments: all cryptos (except USDT of course) are up at least triple digits (Ethereum and Binance Coin are up quadruple digits).
And in BNB we have the only crypto in any year Experiment that is up over 2,000% (+2,369%, actually).
The initial $100 investment into first place BNB? Currently worth $2,470.
That’s just insane.
In second is Ethereum, also in the quadruple digit gains club (+1455%) followed by BTC, up +732%.
Besides Tether, EOS is the worst performing cryptocurrency of the 2020 Top Ten Portfolio. But last place EOS’s 117% gains are almost five times the return of the stock market over the same period of time (see below).
Total Market Cap for the Entire Cryptocurrency Sector:
Over $425 billion dollars was added to the market in March. The crypto market is up +915% over the fifteen month lifespan of the 2020 Top Ten Experiment. For the sixth month in a row, the month-end market cap has set new highs for the 2020 Top Ten Experiment.
If you were able to capture the entire crypto market since, you’d be doing much better than the Experiment’s Top Ten approach (+589%) and much much better than the S&P (+24%) over the same time period. But not better than if you stuck all your eggs in either BNB’s or ETH’s basket.
Down BitDom goes. At 58.1%, it is now approaching the 2020 Top Ten Experiment low of 56.8% set last September.
If you’re new to crypto, keep an eye on this number: a high Bitcoin Dominance signals less of an appetite for altcoins and vice versa.
Overall return on $1,000 investment since January 1st, 2020:
The initial $1000 investment into the 2020 Top Ten Cryptos is now worth $6,892, up +589%. After some time behind the 2019 Top Ten Portfolio, the 2020 Portfolio has regained the lead and is now the best performing of the four Experiments.
Below is a month by month ROI of the 2020 Top Ten Experiment, to give you a sense of perspective and provide an overview as we go along:
By a significant margin, +589% is the highest monthly ROI so far for the 2020 Top Ten. And nothing but green: it has not seen a red month yet, although has gotten close. The range of monthly ROI for the 2020 Top Ten has been massive: between a COVID induced low of +7% in March 2020 and the new high this month of +589%.
Combining the 2018, 2019, 2020, and 2021 Top Ten Crypto Portfolios
So, where do we stand if we combine four years of the Top Ten Crypto Index Fund Experiments?
- 2018 Top Ten Experiment: up +30% (total value $1,300)
- 2019 Top Ten Experiment: up +474% (total value $5,737)
- 2020 Top Ten Experiment: up +589% (total value $6,892)
- 2021 Top Ten Experiment: up +240% (total value $3,399)
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 $17,328 ($1,300 + $5,737 + $6,892 + $3,399).
That’s up +333% on the combined portfolios, a record high for the Top Ten Index Fund Experiment project, and up from +86% last month.
Lost in the numbers? Here’s a table to help visualize the progress of the combined portfolios:
That’s a +333% gain by buying $1k of the cryptos that happened to be in the Top Ten on January 1st, 2018, 2019, 2020, and 2021.
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 four years? While many have come and gone over the life of the experiment, five cryptos have started in Top Ten for all four years: BTC, ETH, XRP, BCH, and LTC. Let’s take a look:
At this point in the Experiments, ETH is still the best “if-I-had-a-time-machine” choice. As of today, $4,000 into Ethereum in $1k chunks on four consecutive New Year’s Days would be worth $36,081. That’s up +802%.
In second place, going all in on Bitcoin with $4,000 USD would have yielded +680%, turning the initial investment into $31,200.
XRP would have been the worst four year all-in bet, but you’d still be +85%. Not bad.
And the Top Ten Index Fund approach?
As you might expect (as indexes are designed to mitigate risk), the +333% gains of the Top Ten Index Fund approach fall somewhere in between. The Top Ten strategy isn’t keeping up with ETH or BTC but it is outperforming a hypothetical all-in investment in both XRP, LTC, and BCH by a healthy margin.
So that’s the Top Ten Crypto Index Fund Experiments snapshot. Let’s take a look at how traditional markets are doing.
Comparison to S&P 500
I’m also tracking the S&P 500 as part of my experiment to have a comparison point to traditional markets. March saw yet another all time high for the S&P. The S&P has returned +24% since January 1st, 2020.
Not bad for a pandemic year, right? This more than doubles the 8% figure that financial planners use for predicted annual market returns.
Now scroll up for how it compares to crypto, or let me just make it easy for you: over the same time period, the 2020 Top Ten Crypto Portfolio is returning about +589%. The initial $1k investment in crypto is now worth about $6,892.
That same $1k I put into crypto in January 2020 would be worth $1240 had it been redirected to the S&P 500 instead.
That’s a $5,652 difference on a $1k investment. And it is by far the largest gap in favor of crypto since the 2020 Top Ten Experiment began.
But that’s just 2020. What about in the longer term? What if I invested in the S&P 500 the same way I did during the first four years of the Top Ten Crypto Index Fund Experiments since January 1st, 2018? What I like to call the world’s slowest dollar cost averaging method? Here are the figures:
- $1000 investment in S&P 500 on January 1st, 2018 = $1500 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1600 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1240 today
- $1000 investment in S&P 500 on January 1st, 2021 = $1070 today
So, 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 $5,410 ($1,500 + $1,600 + $1,240 + $1,070).
That is up +35% since January 2018 compared to a +333% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of 298% in favor of crypto.
You can also compare against five individual coins (BTC, ETH, XRP, BCH, and LTC) by using the table above if you want. Spoiler alert: even the lowest performing crypto (XRP) is still returning about two and a half times more than the S&P 500 over the same time period.
To help provide perspective, here’s a quick look at the combined four year ROI for crypto vs. the S&P up to this point.
That’s six straight monthly wins and seven out of eight monthly victories for crypto.
Another big month for the 2020 Top Ten Crypto Portfolio. With Bitcoin Dominance decreasing a bit, the next few months should be interesting. Remember the 2017/2018 cycle: as BitDom was decreasing, there was a surge in altcoins, followed by a total crypto crash, followed by a bear market lasting for years. Will history repeat itself? Or is it “different this time”?
For those who have supported the Experiments over the years, thank you. For those just getting into crypto, I hope these monthly reports can somehow help with perspective as you embark on your crypto adventures. Buckle up, think long term, don’t invest what you can’t afford to lose, and most importantly, enjoy the ride!
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, 2019, and most recently, January 1st, 2021.
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