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Month Eighteen – UP 26%
Question of the month:
According to a June article citing unnamed sources, which two FinTech companies are planning to allow their users to buy and sell crypto directly?
A) Paypal and Venmo
B) Square and Cashapp
C) Robinhood and Revolut
D) Sofi and Coinbase
Scroll down for the answer.
Ranking and June Winners and Losers
XRP and Stellar slipped one place each in the rankings in June, now at #4 and #14 respectively. EOS fell two spots to #11 and joins Stellar and Tron as the only three cryptos to have dropped out of the 2019 Top Ten since January 1st, 2019. They have been replaced by Binance Coin, Cardano, and newcomer CRO.
Tether was the only crypto to move up in rank in June.
Not a good sign when Tether is the only crypto to move up.
Not a good sign when Tether enters the Top 3.
June Winners – Tether. Second comes Tron, which basically held its ground at -2%.
June Losers – BSV lost -23% of its value in June making it the worst performing of the 2019 Top Ten portfolio. EOS had a rough month as well, down -17%, dropping two spots in the rankings, and falling out of the Top Ten.
If you’re keeping score, here is tally of which coins have the most monthly wins and loses during the first 18 months of the 2019 Top Ten Experiment: Tether is still in the lead with six monthly victories followed by BSV in second place with three. BSV also holds the most monthly losses, finishing last in seven out of eighteen months. The only crypto not to win a month so far? XRP. (In fairness, XRP has also not lost any month yet).
Overall update – BTC in lead, ETH takes over second place, XRP still worst performing
BTC is out front for the second straight month and ETH has taken over second place from BSV. Ahead until April, BSV has simply not keep up with the pack over the last two months. Bitcoin is up +144% since January 2019. The initial $100 investment in BTC is currently worth $249.
Eighteen months in, 50% of the 2019 Top Ten cryptos are in the green since the beginning of the experiment. The other five cryptos are either flat or in negative territory, including last place XRP (down -50% since January 2019).
Total Market Cap for the entire cryptocurrency sector:
The crypto market as a whole is down about $20B in June, but still up +106% since January 2019.
BitDom finally wobbled in June, but not by much – it’s been in a very familiar zone for months now, indicating a lack of excitement (or at least a low risk tolerance) for altcoins. Taking a wider view, the Bitcoin Dominance range since the beginning of the experiment in January 2019 has ranged between 50%-70%.
Overall return on investment since January 1st, 2019:
The 2019 Top Ten Portfolio lost almost $175 in June. After the initial $1000 investment, the 2019 group of Top Ten cryptos is worth $1,259. That’s up about +26%.
Here’s a look at the ROI over the life of the first 18 months of the 2019 Top Ten Index Fund experiment, month by month:
Unlike the completely red table you’ll see in the 2018 Top Ten Experiment, the 2019 crypto table is almost all green. The first month was the lowest point (-9%), and the highest point (+114%) was May 2019.
How does the 2019 Top Ten Index Fund Portfolio compare to the parallel projects?
Taking the three portfolios together, here’s the bottom bottom bottom line:
After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, the combined portfolios are worth $2,710.
That’s down about -10% for the three combined portfolios. Last month that figure was +4%. Better than a few months ago (aka the zombie apocalypse) where it was down -24%, but not yet back at January (+13%) or February (+6%) levels.
Here’s a new table to help visualize the progress of the combined portfolios:
Not exactly inspiring.
How do crypto returns compare to traditional markets?
Comparison to S&P 500:
Good thing I’m tracking the S&P 500 as part of my experiment to have a comparison point with other popular investments options. Even with unemployment, protests, and COVID, the US market continued to rebound in June. It’s now up +24% in the last 18 months.
The initial $1k investment I put into crypto would be worth $1,240 had it been redirected to the S&P 500 in January 2019.
As a reminder (or just scroll up) the 2019 Top Ten portfolio is returning +26% over last 18 months, just about equal to the return of the S&P 500 over the same time period. Just last month the ROI of the 2019 Top Ten crypto portfolio was nearly double the S&P 500 since January 1st, 2019.
But what if I took the same world’s-slowest-dollar-cost-averaging/$1,000-per-year-in-January approach with the S&P 500? It would yield the following:
- $1000 investment in S&P 500 on January 1st, 2018: +$170
- $1000 investment in S&P 500 on January 1st, 2019: +$240
- $1000 investment in S&P 500 on January 1st, 2020: -$40
Taken together, here’s the bottom bottom bottom line for a similar approach with the S&P:
After three $1,000 investments into an S&P 500 index fund in January 2018, 2019, and 2020, my portfolio would be worth $3,370.
That $3,370 is up over+12% since January 2018, compared to the $2,710 value (-10%) of the combined Top Ten Crypto Experiment Portfolios. Here’s another new table that compares the ROI of the combined crypto portfolios to a hypothetical similar approach with the S&P 500:
We see in June the largest difference in favor of the S&P since the beginning of 2020: a 22% gap. Compare that February, when there was only a 1% difference in ROI.
Since January 2019, the crypto market as a whole has gained +106% compared to the 2019 Top Ten Crypto Portfolio which has gained +26%. That’s an 80% gap.
At this point in the 2019 Experiment, an investor would have done much better picking different cryptos or investing in the entire market instead of focusing only on the 2019 Top Ten. Over the course of the first 18 months of tracking the 2019 Top Ten, there have been instances this was a winning strategy, but the cases have been few and far between.
The 2018 Top Ten portfolio, on the other hand, has never outperformed the overall market, at least not in the first thirty months of that Experiment.
And for the most recent 2020 Top Ten group? The opposite had been true: the 2020 Top Ten had easily outperformed the overall market 100% of the time…up until the last two months.
As the world continues to battle COVID, traditional markets seem to be recovering. Will crypto make a significant move in the second half of 2020?
Final word: Stay safe and take care of each other.
Thanks for reading and for supporting the experiment. I hope you’ve found it 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 the original 2018 Top Ten Crypto Index Fund Experiment and the recently launched 2020 Top Ten Experiment.
And the Answer is…
A) Paypal and Venmo
According to a Coindesk report in June, three sources familiar with the matter say that Paypal and Paypal-owned Venmo are planning to allow their users to buy and sell crypto. Paypal has declined to comment.
Help keep the lights on at the Top Ten Crypto Index Fund Experiments.