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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 Three – UP 240%
Though nowhere near as dramatic as last month, the Top Ten Class of 2021 had a very strong March. With the exception of ADA, every crypto finished in the green and the portfolio as a whole had a monthly gain of over 45%. First quarter results: the 2021 Top Ten are up +240%. Newbs: don’t beat yourself up for just getting into crypto: even if you just joined recently, looks like you’re doing alright.
March Ranking, Movement Report, and Dropouts
Two ups and four downs this month:
- BNB – up one place (#4→#3)
- Tether – up one place (#5→#4)
- BCH – down three places (#11→#14)
- ADA – down two places (#3→#5)
- LTC – down one place (#8→#9)
- LINK – down one place (#9→#10)
Top Ten dropout since January 2021: So far, only Bitcoin Cash has dropped out of the 2021 Top Ten, replaced by UNI.
March Winners and Losers
March Winners – For the second month in a row BNB outperformed its Top Ten peers, finishing up +38%. XRP came in second place, up +31%.
March Losers – After a very strong start to the year, ADA came back down to earth a bit this month. It ended March -8%, the only 2021 Top Ten to finish in the red this month.
Overall Update – BNB flips ADA for the lead, all cryptos in green, LTC and BCH at the back of the pack
This month ADA gave up the lead it had held for the first two months of 2021 to BNB. Binance Coin is having a great year so far, up nearly +800% in the first quarter.
The $100 bucks I invested into BNB just three months ago? It is now worth $897.
Besides Tether, Litecoin and Bitcoin Cash are in a tie for the worst performing cryptocurrency of the 2021 Top Ten Portfolio after quarter one. Although the “worst performing” are still pulling in an ROI of +63% in three months.
Total Market Cap for the Entire Cryptocurrency Sector:
After finally cracking the $1 trillion milestone two months ago, the total crypto market cap has almost doubled in just two months. The total market cap is up +148% in Q1 of 2021, a better return of half of the individual cryptos in the 2021 Top Ten Portfolio, including Bitcoin.
From a January 1st high of 70.4% BitDom continues to slide as the year progresses: it ended March at 58.1%. This is no surprise if you’ve been following along with the other Top Ten Crypto Index Fund Experiments – it’s rare that Bitcoin dominance stays as high as the 70s.
For those just getting into crypto, it’s worth paying attention to the Bitcoin dominance figure, as it signals the appetite for altcoins vs. BTC.
Overall return on $1,000 investment since January 1st, 2021:
After three months, the 2021 Top Ten Portfolio is up +240%. The initial $1000 investment on New Year’s Day 2021 is now worth $3,399.
For the recent arrivals worried about being too late to crypto: a) welcome and b) looking good so far!
Here’s the month by month ROI of the 2021 Top Ten Experiment, to give you a sense of perspective and provide an overview as we go along:
Combining the 2018, 2019, 2020, and 2021 Top Ten Crypto Portfolios
As most readers are aware, this is the fourth year of an Experiment I started back in January of 2018, at the height of the last bull run. 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.
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 vs. Top Three Index
Inspired by a suggestion from one of our blog readers, let’s take a look at how the 2021 Top Ten approach would compare to just focusing on the Top Three.
I crunched the numbers, and to make it more interesting, I removed Tether from the index and pulled #4 into the Top Three.
A Top Three Index (minus Tether, plus XRP) would mean $333 into BTC, ETH, and XRP.
After three months, a Top Three Index would be worth $2,422, returning +142%. That’s compared to the $3,399 (240%) of the 2021 Top Ten.
So, at this early point in the 2021 Experiment, it would have been better to go with a Top Ten Index approach.
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. Another month, another all time high for the S&P 500.
The S&P 500 Index is up 7% in Q1 of 2021. The initial $1k investment I put into crypto three months ago would be worth $1,070 had it been redirected to the S&P 500.
The 2021 Top Ten Crypto Portfolio is up +240% over the same time period. Three months in, the initial $1k investment in crypto is now worth $3,399.
That’s a difference of $2,329 on a $1k investment in just one quarter.
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? 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
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.
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.
Since October 2020, the gap between the crypto ROI and the S&P ROI has just gotten bigger and bigger.
A fantastic Q1 for the 2021 Top Ten. In fact, none of the other Experiments had nearly this good a start during the first quarter after launch. Up +240% in three months? At this rate the 2021 Portfolio will be the best performing Experiment of the four before long…
To the long time followers of the Top Ten Experiments, thank you so much for sticking around. For those just getting into crypto, I hope these reports can somehow help you see the highs and lows of what might await you on your crypto adventures. Buckle up, go with the flow, 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 January 1st, 2020.
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