Tracking 2018 Top Ten Cryptocurrencies – Month Forty-Two

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Month Forty-Two – Down -1%

Well, it was an impressive streak while it lasted:  after narrowly avoiding it last month, the 2018 Top Ten got hit with its first all-red month since September 2020.   

After four straight months in the green, the 20218 Top Ten Portfolio is basically back to break even point, down -1%.

Since January 2018, Ethereum is still the best performing crypto overall and BTC and ADA are still in positive territory.  XLM, after clawing its way back to break even point, slipped back into the red in June.

June Movement Report, Ranking, and Dropouts

Mostly downward movement this month:

Downs:

• Dash – down 11 places and now out of the Top Sixty (#51–>#62)
• NEM – down 7 places also out of the Top Sixty (#58–>#65)
• IOTA – down 7 places (#37–>#44)
• XLM – down 5 places (#16–>#21) 
• ADA – down one place (#4–>#5)

Up:

• Bitcoin Cash – up one place (#13–>#12)

Top Ten dropouts since January 2018: After forty-two months of the 2018 Top Ten Experiment, only 40% of the cryptos that started in the Top Ten have remained.  NEM, Dash, Stellar, Bitcoin Cash, IOTA, and Litecoin have been replaced by Binance Coin, Tether, DOT, UNI, Doge, and most recently, USDC.   

June Winners and Losers

June Winner –  No crypto ended June in the green, but Bitcoin gets the W for dropping the least (-9%).

June Losers –  Stellar lost -37% of its value in June, snapping a three month losing streak for the often last place NEM.  XRP had a tough month as well, dropping -35%. 

Tally of Monthly Winners and Losers

After forty-two months, here’s a tally of the monthly winners and losers over the life of the 2018 Top Ten Experiment. 

With 11, Bitcoin has the most monthly wins by quite a bit. In the loss column, NEM has finished in last place 11 of 42 months, or 26% of the time.

Bitcoin is still the only cryptocurrency that hasn’t yet lost a month since January 2018 (although it has come very close a couple of times).

Overall Update –  Portfolio back to break even point, only 30% of cryptos in the green, ETH maintains healthy lead

So, the thrill is gone: we’re right back where we started in January 2018, minus about 11 bucks for our troubles. That four month streak of the 2018 Top Ten Portfolio being in the green?  History.  

This is very familiar territory for the 2018 Top Ten Portfolio.  Over the three and a half years of the Index Fund Experiment, thirty-eight months have been in the red, with only four months of green.  And all of the green months came packed together in the first half of 2021.

30% of the 2018 Top Ten are in positive territory: BTC, ETH, and ADA.  ETH (+192%) is ahead of Bitcoin (+154%) by a good margin and is the best performing crypto of the 2018 Top Ten Portfolio.   ADA is in third place, up a healthy +100% so far.

The initial $100 invested in ETH forty-two months ago is worth $293 today.

Still at the bottom is Dash, down -86% since the Experiment began.  The initial $100 invested forty-two months ago is worth $13 today.  

Total Market Cap for the entire cryptocurrency sector:

After surpassing $2.2T just two months ago, the total crypto market cap has lost nearly $1T, down to $1.38T, the same level it was in February.  

As a sector, it’s not nearly as bleak:  overall crypto is up +139% since January 2018.  If you were able to capture the entire crypto market since New Year’s Day 2018, you’d be doing much, much better than both the Experiment’s Top Ten approach (+-1%) and over double the return of the S&P (+62%) over the same period of time.

Bitcoin dominance:

After five straight months of downward movement, BitDom reversed course this month.  Is this a sign that the crypto market has more or less bottomed out?  Hard to tell, although it’s clear that investors are diverting funds away from riskier altcoins back into the big daddy BTC.

For context, we still have a bit to go before setting a record BitDom low: the last altcoin cycle saw BTC dominance go down to a low of 33% back in the first month of the 2018 Experiment.

Overall return on $1,000 investment since January 1st, 2018: 

The 2018 Top Ten Portfolio lost about -$275 in June.  Not quite as bad as last month’s -$292 drop, but close.  The 2018 Index Fund is basically back to break even point, down about -$11.  

If I decided to cash out the 2018 Top Ten Experiment today, the $1000 initial investment would return $989, down -1% from January 2018.

Here’s a look at the ROI over the life of the experiment, month by month:

Being down -1% after 3.5 years is definitely disappointing, but for context it is nowhere near the absolute bottom: in January 2019 the 2018 Top Ten Portfolio was down -88% followed closely by the -87% Zombie Apocalypse month (March 2020) just over a year ago. 

For those just entering crypto, this is a gut check: can you stomach being down -1%?  What about down -88% on your investment after one year and -87% after two years?  When crypto veterans stress that you shouldn’t be investing what you can’t afford to lose, they mean it. 

Combining the 2018, 2019, 2020, and 2021 Top Ten Crypto Portfolios

Alright, that’s that for the 2018 Top Ten Crypto Index Fund Experiment recap.

But I didn’t stop the party in 2018:  I invested another $1000 in the 2019, 2020, and 2021 Top Ten Cryptos as well.  How are the other Crypto Index Fund Experiments doing?  

• 2018 Top Ten Experiment: down -1% (total value $989)
• 2019 Top Ten Experiment: up +341% (total value $4,414)
• 2020 Top Ten Experiment: up +469% (total value $5,688)
• 2021 Top Ten Experiment: up +184% (total value $2,840)

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 $13,931 ($989 + $4,414 + $5,688 + $2,840).

That’s up +248% on the combined portfolio.  Another massive drop from last month, but with a bit of perspective we can see that the combined portfolios are back to where they were a few months ago in February. 

That’s a +248% 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 the Experiment to have a comparison point with other popular investments options.  Another solid month for the S&P in June and yet another all time high.

The S&P 500 is up +62% since January 2018, so the initial $1k investment into crypto on January 1st, 2018 would be worth $1620 had it been redirected to the S&P.  

Compared to the -1% return of the 2018 Experiment, the S&P is well ahead of the Top Ten Crypto Portfolio. 

But it’s not a very fair fight when I combine the four portfolios: taking 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 yields the following:

• $1000 investment in S&P 500 on January 1st, 2018 = $1620 today
• $1000 investment in S&P 500 on January 1st, 2019 = $1720 today
• $1000 investment in S&P 500 on January 1st, 2020 = $1340 today
• $1000 investment in S&P 500 on January 1st, 2021 = $1150 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 $5,830 ($1,620 + $1,720 + $1,340 + $1,150)

That is up +46% since January 2018 compared to a +248% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of over 200 percentage points in favor of crypto.

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.  

Despite the less than stellar performance of crypto over the last couple of months, it is still far, far ahead of the S&P over the same time period.

Conclusion:

Two straight down months for crypto, something we haven’t seen lately.  The crypto crystal ball gazers seem divided on whether we have already hit the top of the bull cycle or only hitting some kind of mid bull cycle bumps.  Technical analysis in crypto is like reading tea leaves or entrails to divine the future: the guesses of the experts are as good as yours or mine.  

But timing the market isn’t what these Experiments are about: they appear to be showing that taking a slow, steady, and long term approach appears to be paying off.  If you believe that crypto and blockchain technology will be here to stay, stick around.  But be careful out there: crypto glory and wealth isn’t worth anything if you’ve developed a heart condition along the way.   

To the long-time Experiment followers: thanks so much for reading and for supporting the project over the years.  

For those just getting into crypto, welcome! I hope these reports can somehow help you see what you may be in for as you begin your crypto adventures.  Buckle up, think long term, don’t invest what you can’t afford to lose, and enjoy the ride!

Feel free to reach out with any questions and stay tuned for monthly 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.

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