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Month Forty-Three – UP 12%
Ah, that’s better. After an all red last month (its first since September 2020) the 2018 Top Ten Portfolio enjoyed an almost all green July.
The 2018 group of Top Ten cryptos (BTC, XRP, ETH, BCH, ADA, LTC, IOTA, NEM, Dash, and Stellar) is up 12% since the beginning of the Experiment.
Since January 2018, Ethereum is the best performing crypto overall. BTC and ADA are in positive territory as well.
July Movement Report, Ranking, and Dropouts
More ups than downs this month, always nice to see:
- NEM – up four places (#65–>#61)
- Dash – up three places (#62–>#59)
- XRP – up one place (#7–>#6)
- Stellar – up two places (#21–>#19)
- IOTA – down two places (#44–>#46)
- Litecoin – down one place (#14–>#15)
And here’s a look at the movement in ranks since January 2018:
Top Ten dropouts since January 2018: After forty-three 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 NEM, Dash, Stellar, Bitcoin Cash, IOTA, and Litecoin have been replaced by Binance Coin, Tether, DOT, UNI, Doge, and most recently, USDC.
July Winners and Losers
July Winners – Believe it or not, NEM had a great month, gaining +31% in value in July. Second place this month goes to Ethereum, up +21%
July Losers – Basically flat, but ADA lost -1% of its value in July, making it the worst performer and the only crypto that finished in the red this month.
Tally of Monthly Winners and Losers
After forty-three months, here’s a tally of the monthly winners and losers over the life of the 2018 Top Ten Experiment.
With 11, Bitcoin has three more monthly wins than second place Cardano. Despite July’s win, NEM has finished last place most often (11 months out of 43).
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 in positive territory, only 30% of cryptos in the green, ETH well in the lead.
After last month’s disheartening return to break even point, the 2018 Top Ten is solidly back in the green, up +12 from where it started in January 2018.
As a reminder: green is still very unfamiliar territory for the 2018 Top Ten Portfolio.
Over the first 43 months of the 2018 Index Fund Experiment, thirty-eight months have been in the red, with only five months of green. And all five of the green months have come in 2021. Check out the table below to see the monthly ROI summary.
30% of the 2018 Top Ten are in positive territory: BTC, ETH, and ADA. ETH (+253%) is ahead of Bitcoin (+202%) by quite a bit and is the best performing crypto of the 2018 Top Ten Portfolio. ADA is in third place, up nearly +100% so far.
The initial $100 invested in ETH forty-three months ago? It’s worth $354 today.
Dash remains at the bottom, down -84% since the Experiment began. The initial $100 invested forty-three months ago is worth $15 bucks today.
Total Market Cap for the entire cryptocurrency sector:
Ohhh, fancy new chart! My table was getting a bit unwieldy so I tried to mix it up a bit. Hopefully conveys the same information.
The total market finished July at nearly $1.6T, picking up about $223B during the month. This is a very welcome change after two straight months of heading in the wrong direction. Quick context check: it was at $2.2T just three months ago.
Overall crypto as a sector is doing quite well: it is up +178% since January 2018. If you were able to capture the entire crypto market since New Year’s Day 2018, you’d be doing great. And much, much better than both the Experiment’s Top Ten approach (+12%) and the return of the S&P (+64%) over the same period of time.
Ohhh, another new chart!
The BitDom bounce continued this month. It ticked up 1.3% to finish July at 46.6%. 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 gained about $127 in July. The 2018 Index Fund ROI is close to where it was in February 2021.
If I decided to cash out the 2018 Top Ten Experiment today, the $1000 initial investment would be worth $1,116, up 12% from January 2018.
Here’s a look at the ROI over the life of the experiment, month by month, since the beginning of the 2018 Experiment over 3.5 years ago:
It’s nice to be back in positive territory, but as you can see on the table above, this green thing is pretty new for this group of cryptos. The vast, vast majority of the time has been spent in the red. The absolute lowest point was in January 2019 when the 2018 Top Ten Portfolio was down -88%.
For those just entering the space, think carefully before jumping too deeply into crypto. Despite what the crypto experts say, no one knows where the price will be in a year. I was down -88% after one year. Will we be down -88% one year from now? I don’t think so, but I don’t know. No one knows, this is crypto.
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: up 12% (total value $1,116)
- 2019 Top Ten Experiment: up +398% (total value $4,984)
- 2020 Top Ten Experiment: up +552% (total value $6,524)
- 2021 Top Ten Experiment: up +214% (total value $3,137)
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 $15,761 ($1,116 + $4,984 + $6,524 + $3,137).
That’s up +294% on the combined portfolio, a nice bump up from last month. Here’s the combined monthly ROI since I started tracking it in January 2020:
That’s a +294% 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
An index fund is designed to mitigate risks, so going all-in on one coin would have produced better returns, right?
Short answer: yes….if you guess correctly. 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.
Assuming the same $1k on January 1st four years in a row strategy of the Experiment, which crypto would prevail?
ETH would have returned over double that of second place Bitcoin. $4,000 into Ethereum in $1k chunks once a year would now be worth $46,038. That’s up +1051%.
In distant second place, going all-in on Bitcoin with $4,000 USD would have yielded +417%, turning the initial $4k investment into $20,670.
Third place? The Top Ten Portfolio approach, up +294%. Not too bad! This is about what you’d expect for an Index strategy, falling somewhere between the best and worst performers.
At the bottom? Bitcoin Cash at +91%.
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 record setting month for the S&P Index in July and yet another all time high.
Whoa, yet another sexy new chart!??!?!
The S&P 500 is up +64% since January 2018, so the initial $1k investment into crypto on January 1st, 2018 would be worth $1640 had it been redirected to the S&P.
Compared to the 12% return of the 2018 Experiment, the S&P is far ahead of the Top Ten Crypto Portfolio.
Quite a different story when I combine the four portfolios though: 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 = $1640 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1750 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1360 today
- $1000 investment in S&P 500 on January 1st, 2021 = $1170 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 $5,920 ($1,640 + $1,750 + $1,360 + $1,170)
That is up +48% since January 2018 compared to a +294% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of nearly 250 percentage points 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 severely 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.
A nice bounce back in July after two straight down months for crypto. The current recovery lends some credibility to some of the “expert” voices who predicted that the recent dip was merely a mid-cycle correction. But one good month after two bad ones isn’t enough to call a trend, if you ask me. And TA in crypto is often ridiculous – might as well flip a coin.
Many thanks to the long-time Experiment followers, appreciate you taking the time to follow along over the years. For those just getting into crypto, welcome! I hope these reports can somehow give you a taste of 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 try to 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.
Help keep the lights on at the Top Ten Crypto Index Fund Experiments.
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