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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 Sixteen – UP 952%
Welcome to the best performing of the four Top Ten Crypto Index Fund Experiments, by far.
The 2020 Top Ten Portfolio is a machine. It picked up an additional 353% since the end of March, 100% of this group is in the green, all have at least triple digit price growth with two cryptos in four digit growth territory.
The +952% return of the Top Ten Index approach has outperformed eight 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 (more on that below).
April Movement Report, Ranking, and Dropouts
A lot of movement this month with 2020 Top Ten cryptos:
- XRP – up three places (#7→#4)
- Bitcoin Cash – up four places (#14→#10) and back in the Top Ten
- BSV – up one place (#29→#28)
- EOS – down two places (#24→#26)
- Litecoin – down two places (#9→11)
- Tether – down one place (#4→#5)
- XTZ – a big fall, down seven places (#31→#38)
Top Ten dropouts since January 2020: after sixteen months, 40% of the cryptos that started in the Top Ten have dropped out: EOS, BSV, Tezos, and most recently Litecoin have been replaced by Cardano, Polkadot, UNI, and Doge. Yes, Doge.
EOS and BSV are out of the Top Twenty and XTZ’s is out of the Top Thirty.
April Winners and Losers
April Winners – XRP (+172%) easily had the best month, followed distantly by BNB, up +78%
April Losers – For the first time in the 2020 Top Ten Crypto Index Fund Experiment, Bitcoin had the weakest monthly performance, down -5% in April.
Tally of Monthly Winners and Losers
After sixteen months, here’s a snapshot of the 2020 Top Ten Experiment’s monthly winners and losers:
With four monthly victories, ETH has doubled the wins of the tied for second place BTC, USDT, BNB, XRP, and Tezos. Bitcoin’s loss in April was its first of the 2020 Top Ten Crypto Experiment.
Overall Update – BNB up over 4,000%, 100% of cryptos in triple digit positive territory, worst performer (EOS) still up +157%.
The 2020 Top Ten continue to outperform the other Top Ten Crypto Experiments and this month pulled further ahead of the second place 2019 Top Ten Portfolio. All cryptos (except USDT of course) are up at least triple digits and Ethereum and Binance Coin are up quadruple digits.
BNB’s gains since January 2020 have been off the chart. The initial $100 investment into Binance Coin is currently worth $4,387, a gain of +4,286%.
In second is Ethereum, also in the quadruple digit gains club, up +2171%.
Besides USDT, the worst performer in the 2020 group is EOS. But EOS’ +157% gains are over 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 $286 billion dollars was added to the market in April. The crypto market is up +1066% over the sixteen month lifespan of the 2020 Top Ten Experiment. For the seventh 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 January 2020 (+1066%), you’d be doing better than the Experiment’s Top Ten approach (+952%) and much, much, much better than the S&P (+29%) over the same time period. The index fund strategy has outperformed eight of the ten individual cryptos held within the index.
A big drop for BitDom in April: this month’s 48.2% is the lowest level so far in the life of the 2020 Experiment, by far. You’d have to go back to last September to find the next lowest BTC dominance level.
Overall return on $1,000 investment since January 1st, 2020:
A massive jump in value for the 2020 Top Ten Crypto Portfolio in April. The initial $1000 investment into the 2020 Top Ten Cryptos is now worth $10,5236, up +952% compared to +589% just last month. After some time behind the 2019 Top Ten Portfolio, the 2020 Portfolio is now far and away 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:
At +952%, it is another record ROI month for the 2020 Top Ten. Although the portfolio has never experienced a red month, it has definitely seen ups and downs: a little over a year ago in March 2020, this same portfolio saw a COVID induced low of +7%.
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 +56% (total value $1,556)
- 2019 Top Ten Experiment: up +653% (total value $7,527)
- 2020 Top Ten Experiment: up +952% (total value $10,522)
- 2021 Top Ten Experiment: up +393% (total value $4,927)
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 $24,532 ($1,556 + $7,527 + $10,522 + $4,927).
That’s up +513% on the combined portfolios, another record high for the Top Ten Index Fund Experiment project, up from +333% last month.
Lost in the numbers? Here’s a table to help visualize the progress of the combined portfolios:
That’s a +513% 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:
ETH is well in the lead and the still 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 $52,705. That’s up +1218%. That’s nuts.
In second place, going all in on Bitcoin with $4,000 USD would have yielded +638%, turning the initial investment into $29,530.
Third place? The Top Ten Index Fund approach!
As you might expect (as indexes are designed to mitigate risk), the +513% 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.
Bitcoin Cash would have been the worst four year all-in bet, but you’d still be +249%.
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 +29% since January 1st, 2020.
Pretty amazing returns for a period of time largely dominated by a pandemic. This more than triples the 8%/year figure that many financial planners use for predicted annual market returns.
That same $1k I put into crypto in January 2020 would be worth $1290 had it been redirected to the S&P 500 instead.
Crypto over the same time period? The 2020 Top Ten Crypto Portfolio is returning +952%. The initial $1k investment in crypto is now worth $10,523.
That’s a difference of $9,233.
On a $1k investment!
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 = $1564 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1670 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1290 today
- $1000 investment in S&P 500 on January 1st, 2021 = $1110 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 $5,634 ($1,564 + $1,670 + $1,290 + $1,110)
That is up +41% since January 2018 compared to a +513% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of 472% in favor of crypto.
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 seven straight monthly wins and seven out of eight monthly victories for crypto.
Despite Bitcoin’s stagnation in April, the 2020 Top Ten Crypto Portfolio is approaching a four digit ROI. With Bitcoin Dominance plummeting 10%, it’s starting to get interesting. For those who weren’t around in 2017/2018, we’ve seen this movie before: Bitcoin pumps, alts follow, then all crash. We’ll soon see if history repeats itself.
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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