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Month Twenty-One – UP 731%
The 2020 Top Ten Crypto Index Fund consists of: BTC, ETH, XRP, USDT, BCH, Litecoin, EOS, BNB, BSV, and Tezos.
September highlights for the 2020 Top Ten Portfolio:
- For the second month in a row, Tezos runs away with the monthly victory and saves the 2020 Top Ten Portfolio from a dreaded all-red month.
- BNB maintains overall lead, but second place Ethereum gain a lot of ground in September.
- The 2020 Top Ten Crypto Portolio is the best performing of all four Top Ten Experiments.
This group of cryptos also highlights the benefits of an index fund strategy: the +731% return of the 2020 Top Ten Portfolio has outperformed eight of the individual component cryptos contained within the Index. Only by guessing right and throwing all your eggs into Ethereum and/or Binance Coin would you have performed better than spreading out the risk, index style.
September Movement Report, Ranking, and Dropouts
As was the case last month, only XTZ climbed in rank in September. The other cryptos maintained their positions or slid downward.
- Tezos – up 4 places (#34–>#30)
- BSV – down 8 places (#46–#54)
- EOS – down 7 places (#33–>#40)
- Bitcoin Cash – down 4 places (#14–>#18)
Top Ten dropouts since January 2020: after twenty-one months, half of the cryptos that started in the Top Ten have dropped out: EOS, BSV, Tezos, Litecoin, and Bitcoin Cash have been replaced by Cardano, Polkadot, Solana, Doge, and USDC.
BSV has now dropped out of the Top Fifty.
September Winners and Losers
September Winners – Only Tezos (+23%) finished the month in positive territory.
September Losers – EOS (-20%) had the worst month followed by Bitcoin Cash (-19%).
Tally of Monthly Winners and Losers
After twenty-one months, here’s a snapshot of the 2020 Top Ten Experiment’s monthly winners and losers:
With five monthly victories, ETH leads the pack and Tezos has the second most monthly victories. Tether still has the most monthly losses, a good sign for the 2020 Top Ten Portfolio.
Overall Update – BNB still in lead, ETH second place. 100% of cryptos in positive territory, 2020 Top Ten best performing of the four Experiments
The 2020 Top Ten Portfolio continues to be the best performing of the four Top Ten Crypto Index Fund Experiments. 100% of the 2020 cryptos are in positive territory, most have at least triple digit price growth. Two have four digit growth (BNB and ETH). Binance Coin continues to hold a commanding lead, but second place Ethereum gained some ground in September.
The initial $100 investment twenty-one months ago into first place Binance Coin? Currently worth $2,972, an increase of +2,871%.
In second is Ethereum, also with quadruple digit gains, up +2,454%.
Besides USDT, the worst performer in the 2020 group is BSV, up +40% since January 2020. Anyone skilled in DeFi could have returned much more than +40% using stablecoins like Tether fairly easily over the last couple of years.
Total Market Cap for the Entire Cryptocurrency Sector:
The total crypto market lost about $108B in September, settling at just over $2.1T. As a sector, crypto is up +1015% over the twenty-one month lifespan of the 2020 Top Ten Experiment.
If you were able to capture the entire crypto market since January 2020 (+1015%), you’d be doing quite a bit better than the Experiment’s Top Ten approach (+731%) and ridiculously better than the S&P (+35%) over the same time period. Much more on the S&P below.
The Top Ten index fund strategy has done pretty well up to this point in the experiment: it has outperformed eight of the ten individual cryptos held within the index. Only by guessing correctly on ETH or BNB would you have beaten the Top Ten approach.
Crypto Market Cap Low Point in the 2020 Top Ten Crypto Index Experiment: $185B in March 2020.
Crypto Market Cap High Point in the 2020 Top Ten Crypto Index Experiment: $2.22T last month.
BitDom bounced slightly in September, up to 43.2% compared to 42% in August. This is the low end of the range when looking at the timeframe as a whole.
For context, here are the high and low points of BTC domination over the twenty-one month life of the 2020 Experiment:
Low Point in the 2020 Top Ten Crypto Index Experiment: 41.9% in May 2021.
High Point in the 2020 Top Ten Crypto Index Experiment: 70.4% in December 2020.
Overall return on $1,000 investment since January 1st, 2020:
The 2020 Top Ten Portfolio picked up $1,162 in September and is now worth $8,309 (+731%) from the initial $1k investment. For some context, the all time high of the 2020 Top Ten Portfolio was $10,5236 just five months ago).
The 2020 Portfolio remains 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:
The portfolio has yet to experience a red month, although a little over a year ago in March 2020 it came close, returning 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 +46% (total value $1,460)
- 2019 Top Ten Experiment: up +510% (total value $6,098)
- 2020 Top Ten Experiment: up +731% (total value $8,309)
- 2021 Top Ten Experiment: up +333% (total value $4,330)
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 $20,197 ($1,460 + $6,098 + $8,309 + $4,330).
That’s up +405% on the combined portfolios.
Lost in the numbers? Here’s a table to help visualize the progress of the combined portfolios:
That’s a +405% gain by investing $1k on whichever cryptos happened to be in the Top Ten on January 1st for four straight years.
Comparison to S&P 500
I’m also tracking the S&P 500 as part of my experiment to have a comparison point with traditional markets. For the first time in nearly a year, the S&P 500 did not reach a month end all time high in September:
Since it has returned +35% since January 1st, 2020, that same $1k I put into crypto in January 2020 would be worth $1350 had it been redirected to the S&P 500 instead.
Crypto over the same time period? The 2020 Top Ten Crypto Portfolio is returning +731%, worth $$8,309.
That’s a difference of $6,959.
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 = $1,630 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1,740 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1,350 today
- $1000 investment in S&P 500 on January 1st, 2021 = $1,160 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 $5,880 ($1,630 + $1,740 + $1,350 + $1,160)
That is up +47% since January 2018 compared to a +405% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of 358% 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.
After bouncing back from a three month losing streak in August, the 2020 Top Ten portfolio slid down once again. With the first three quarters in the rear view mirror, what does traditionally strong Q4 have in store for crypto?
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, try to 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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