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Month Thirty Eight – UP 15%
Thirty-eight months. Treinta y ocho. Trente-huit.
After thirty eight extremely long months I’m ecstatic to report that the 2018 Top Ten Crypto Index Fund has…dramatic pause…
And then some!
The 2018 Portfolio has four cryptos to thank for making this collection of cryptos finally profitable, the only four to be in positive territory at this point in the experiment: BTC, ETH, ADA, and XLM.
This marks the very first time that the 2018 portfolio has finished a month in positive territory since the Experiment began over three years ago. It is now up +15% since January 2018.
This is still well behind the S&P’s +46% over the same time period (much more on this below), but one milestone at a time.
February Ranking, Movement Report, and Dropouts
More ups than downs this month for the 2018 Portfolio.
- Stellar – up one place (#11→#10)
- Cardano – up three places (#6→#3)
- NEM – up four places (#20→#16)
- IOTA – up twelve places (#37→#25)
- Bitcoin Cash – down one place (#10→#11, and out of the Top Ten)
- XRP – down three places (#4→#7)
Some impressive upward movement this month from projects that have been declared dead at various times over the life of the experiment.
(Although, in fairness, each of the 2018 Top Ten has been declared dead multiple times over the last three years).
It didn’t lose ground in February, but Dash has fallen the furthest overall, now out of the Top Forty.
Top Ten dropouts since January 2018: After thirty eight months of the 2018 Top Ten Experiment, 40% of the cryptos that started in the Top Ten have dropped out. NEM, Dash, IOTA, and Bitcoin Cash have been replaced by Binance Coin, Tether, LINK, and DOT.
For trivia night: Ethereum and Cardano are the only Top Ten cryptos that have climbed in rank since January 2018.
February Winners and Losers
February Winners – Cardano impressively followed its +126% January with a +220% February and is now well up (+94%) since the Experiment began in January 2018. This is the same Cardano that was down -95% less than a year ago. IOTA finished a tough-luck second place, finishing the month up a massive +194%.
February Losers – Every crypto finished in positive territory this month, but since it gained “only” +13%, Ethereum picks up the loss this month. XRP was the second worst performer, up +20%.
Tally of Monthly Winners and Losers
After thirty eight months, the table below gives a good sense of the winners and losers over the life of the 2018 Top Ten Experiment.
Bitcoin still has the most monthly wins (10), but Cardano is gaining ground. NEM has lost 8 months, the most out of the 2018 Top Ten Cryptos. And Bitcoin is unique as the only cryptocurrency that hasn’t lost a month yet since January 2018 (although it has come close a couple of times).
Overall Update – BTC, ETH, ADA, and XLM only cryptos in green, overall portfolio breaks into the green +15%, and Bitcoin Cash in last place.
We are up! It took thirty eight months, but I’m very happy to report that the 2018 Top Ten portfolio is finally in the green. To see how quickly and dramatically crypto has changed in the past few months, here are some recent milestones for the 2018 Top Ten Index Fund Portfolio:
- April 1st, 2020 – down -87%
- November 1st, 2020 – down -75%
- January 1st, 2021 – down -50%
- February 1st, 2021 – down -25%
- Now – up +15%
This upward journey has been led by BTC (+271%), ETH (+113%), and ADA (+94%). XLM (+34%) is also in the green. The next two in line seem to be Litecoin and, unbelievably, NEM, but we’ll have to see what happens
At this point in the experiment, the biggest drag on the 2018 Top Ten is Bitcoin Cash, down -80% as of this update. The initial $100 invested in BCH thirty eight months ago is worth $19.60 today.
Total Market Cap for the entire cryptocurrency sector:
The overall market is on a tear. After finally cracking the $1 trillion mark last month, the total crypto market cap added nearly half a trillion additional in February. For the fourth month in a row this represents a higher level than when the 2018 Experiment started over three years ago. Up +161% since January 2018, the crypto market cap is now crushing the 46% return of the S&P over the same time period.
Not much to report this month with BitDom: it declined slightly from 62.2% in January to 61% in February. If you’re just joining us, Bitcoin Dominance is a helpful figure to keep your eye on: a falling BitDom percentage means Alts are ascendant.
Overall return on $1,000 investment since January 1st, 2018:
The 2018 Top Ten Portfolio swung +40% this month, gaining over $400 bucks in February. This marks the biggest one-month gain since the Experiment began thirty-eight months ago. This is completely new territory for the 2018 Portfolio: you’d have to go back to April 2018 (+26%) to find comparable positive movement.
If I decided to pull the plug on the 2018 Top Ten Experiment today, the $1000 initial investment would return about $1,150, up +15% from January 2018.
It’s a bit surreal to have broken even after so many months reporting losses for the 2018 Top Ten Index Fund Experiment. But that indeed is the case. And not only has this Portfolio broken even, but it is now in positive territory. If you want to get a sense how we finally arrived at this point, take a look at the ROI over the life of the experiment, month by month:
The absolute bottom was back in January 2019 when the 2018 Top Ten Portfolio was down -88%. For those just entering the space, this is not theoretical, this is recent history. Take a moment to think about being down -88% on an investment after one year and plan your moves accordingly.
Combining the 2018, 2019, 2020, and 2021 Top Ten Crypto Portfolios
So the 2018 Top Ten Crypto Portfolio is finally in the green. After investing another $1000 in the Top Ten in 2019, 2020, and 2021 how are the other Experiments holding up? Let’s take a look:
- 2018 Top Ten Experiment: up +15% (total value $1,150)
- 2019 Top Ten Experiment: up +354% (total value $4,543)
- 2020 Top Ten Experiment: up +426% (total value $5,264)
- 2021 Top Ten Experiment: up +194% (total value $2,936)
So overall? 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 $13,893 ($1,150 + $4,543 + $5,264 + $2,936).
That’s up +247% on the combined portfolios.
Here’s a table to help visualize:
That’s an +247% gain by investing $1k on whichever cryptos happened to be in the Top Ten on January 1st for four straight years.
Top Ten Approach vs. All-In Approach
But surely I would have done even better if I invested the $1k into just one crypto, right?
Depends on your choice! Let’s take a look.
Only five cryptos have begun each of the last four years in the Top Ten: BTC, ETH, XRP, BCH, and LTC. Which one wins?
Since I started tracking this metric, there’s been a bit of a back and forth between Bitcoin and Ethereum. This month, for the second time in a row, ETH would have given the best return on investment: $4,000 into Ethereum in $1k chunks once a year would now be worth an impressive $27,794. That’s up +826% and a pretty good argument for dollar cost averaging.
In second place, going all in on Bitcoin with $4,000 USD would have yielded +747%, turning the initial investment into $25,400.
XRP, would have been the worst four year all-in bet, with a return of +88%. But even that is nearly double the return from traditional markets (more on that below).
And the Top Ten Index Fund strategy?
As you might expect, as indexes are designed to mitigate risk, the +247% 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 and BCH by quite a bit.
Comparison to S&P 500:
I’m also tracking the S&P 500 as part of the Experiment to have a comparison point with other popular investments options. The S&P 500 Index hit a new all time high in February and is up +46% since January 2018.
The initial $1k investment into crypto on January 1st, 2018 would be worth about $1460 had it been redirected to the S&P.
But what if I took the same invest-$1,000-on-January-1st-of-each-year approach with the S&P 500 that I’ve been documenting through the Top Ten Crypto Experiments? Here are the numbers:
- $1000 investment in S&P 500 on January 1st, 2018 = $1460 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1560 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1210 today
- $1000 investment in S&P 500 on January 1st, 2021 = $1040 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 $5,270.
That is up +32% since January 2018 compared to a +247% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of 215% in favor of crypto.
You can compare against five individual coins (BTC, ETH, XRP, BCH, and LTC) by using the table above if you want. The key takeaway? Using a similar investing strategy, the S&P 500 is currently underperforming XRP, Bitcoin Cash, BTC, ETH, LTC and the Top Ten Crypto Portfolio approach.
Here’s a table summarizing the four year ROI comparison between a Top Ten Crypto approach and the S&P as per the rules of the Top Ten Experiments:
Even with stocks at all time highs, the Top Ten Crypto Index Fund Portfolio is starting to pull away from traditional markets.
An unbelievable run in recent months has finally propelled the 2018 Top Ten Portfolio into the green. It’s been an everlong road, but great to see some of the cryptos in this group finally break even and beyond. Cardano had a great February and now joins Bitcoin, Ethereum, and Stellar in positive territory. LTC and comeback-kid NEM seem to be next in line.
To both new and long time Experiment followers: thanks so much for reading and for supporting the project, I hope you’ve found them helpful. I continue to be committed to seeing this process through and reporting along the way.
Feel free to reach out with any questions and stay tuned for progress reports. Keep an eye out for my parallel projects where I repeat the experiment, purchasing another $1000 ($100 each) of new sets of Top Ten cryptos as of January 1st, 2019, January 1st, 2020, and most recently, January 1st, 2021.
For those just getting into crypto, welcome! I hope these reports can somehow help you see the highs and lows of what might await you 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!
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