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Month Thirty-One – UP 398%
Snapping a two month all-red streak that started in May, the 2019 Top Ten Crypto Index Fund portfolio bounced nicely back in July. With the exceptions of BSV and Tron, this group of ten finished in positive territory, with Ethereum leading the way this month.
July Movement Report, Ranking, and Dropouts
A lot of movement this month for the 2019 Top Ten Portfolio, most of it downward:
- XRP – up one place (#7–>#6)
- Stellar – up two places (#21–>#19) and back into the Top Twenty
- Tron – down one place (#25–>#26)
- EOS – down two places (#27–>#29)
- Litecoin – down one place (#14–>#15)
- BSV – down nine places (#31–>#40)
Top Ten dropouts since January 2019: After thirty months, 60% of the cryptos that started in the Top Ten in January 2019 have been knocked out. EOS, Litecoin, BSV, Stellar, Bitcoin Cash, and Tron have been replaced by Binance Coin, Doge, Cardano, UNI, USDC, and Polkadot.
BSV dropped nine places in July and now is in danger of dropping out of the Top Forty.
July Winners and Losers
July Winners – ETH (+21%) outperformed the field this month followed closely by Bitcoin (+19%).
July Losers – Although only losing -2.3% of its value, BSV had a rough July, dropping nine places and underperforming its peers. Close behind, Tron is the second worst performer of the month, down -2.1%.
Tally of Monthly Winners and Losers
Which crypto holds the most wins or losses over the life of the project? Here’s a snapshot of the winners and losers over the first thirty-one months of the 2019 Top Ten Experiment:
By a large margin, Tether still has the greatest number of monthly victories (9) followed by BTC with five.
Every crypto has won at least one month since January 2019 and BSV has underperformed its peers 11 out of 31 months (or 35% of the time).
Overall Update – ETH well ahead, all cryptos in positive territory, BSV worst performing
Have a time traveling DeLorean? Go back to the start of the 2019 Experiment and pick yourself up some Ethereum. ETH is easily the best performer of this group, up 1,763% as of this report. Second place is BTC, up +954%.
The $100 investment into first place ETH on January 1st, 2019 is currently worth $1,913.
After thirty-one months, 100% of the cryptos in the 2019 Top Ten Portfolio are in positive territory. Not counting stablecoin Tether, the worst performing crypto is BSV, which is still up “only” +51%.
Although the 2019 Top Ten Portfolio is up an impressive +398%, it is still second place behind the 2020 Top Ten Portfolio which is up +552%.
Total Market Cap for the Entire Cryptocurrency Sector:
The total market finished July at nearly $1.6T, adding about $223B during the month. The entire cryptocurrency sector is up +1157% since January 2019. That’s still well behind first place ETH (1,763%) but much better than the rest of the cryptos (including second place Bitcoin’s +954%) and much better than the Top Ten approach (+398%).
Low Point in the 2019 Top Ten Crypto Index Experiment: $114B in February 2019.
High Point in the 2019 Top Ten Crypto Index Experiment: $2.2T in May 2021.
BitDom continued to bounce back up this month (46.6%) after a 2019 Top Ten Index Fund Experiment record low just a few months ago. For context, here are the high and low points of BTC domination over the life of the 2019 Experiment:
Low Point in the 2019 Top Ten Crypto Index Experiment: 42% in June 2021.
High Point in the 2019 Top Ten Crypto Index Experiment: 70% in August 2019.
Overall return on $1,000 investment since January 1st, 2019:
The 2019 Top Ten Cryptos Portfolio gained $570 in July. After thirty-one months the value of the initial $1000 investment is $4,984, up +398%.
Here’s a table summarizing the monthly ROI over the life of the 2019 Top Ten Index Fund experiment, which provides a pretty good sense of the journey to this point:
Fairly steady upward movements punctuated by some very big dips. During the Zombie Apocalypse, for example, the 2019 Top Ten Portfolio was returning only +6%.
Combining the 2018, 2019, 2020, and 2021 Top Ten Crypto Portfolios
Speaking of other Top Ten Portfolios, let’s put them all together now:
- 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)
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, roughly the same value as they held in March of this year.
Here’s a table to help visualize the progress of the combined portfolios:
In summary: That’s an +294% gain by investing $1k on whichever cryptos happened to be in the Top Ten on January 1st for four straight years.
Top Ten Index vs. Top Five Index
Inspired by a suggestion from one of our blog readers, let’s take a look at how the 2019 Top Ten approach would compare to a hypothetical Top Five Index.
A Top Five 2019 Index would mean investing $200 into BTC, XRP, ETH, BCH, and EOS.
After thirty-one months, a Top Five Index would be worth $7,367, returning 637%. That’s compared to the $4,984 (+398%) returns of the 2019 Top Ten Index.
Once again, it is very clear that going with the five big boys as of January 1st, 2019 would have been the much better approach.
That’s a wrap for the crypto update. How does the cryptocurrency market compare to the stock market?
Comparison to S&P 500:
I’m also tracking the S&P 500 as part of the experiments to have a comparison point with traditional markets. Yet another all time high for the S&P in July:
Because the S&P 500 Index is up 75% since January 2019, the initial $1k investment I put into crypto 2.5+ years ago would be worth $1,750 had it been redirected to the S&P 500 in January 2019.
Even though an extremely solid return for traditional markets, that +75% return is nearly three hundred and twenty-five percentage points behind the return of the 2019 Top Ten Portfolio over the same time period.
But what if I took the same world’s-slowest-dollar-cost-averaging $1,000-per-year-on-January-1st-Crypto-Index-Fund-Experiment approach with the S&P 500? It would yield 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 almost 250 percentage points in favor of crypto.
Here’s a table providing an overview of the four year ROI comparison between a Top Ten Crypto approach and the S&P:
That’s a ten month streak and a 246% lead for crypto, about the same as a few months ago in March.
Just when the two straight red months had the naysayers, erm, naysaying, crypto bounces back. Is one good month enough to show we are truly in a bull market, with just some bumps along the way? Maybe. Maybe not. And maybe it doesn’t matter: maybe the lesson that can be drawn from these reports and experiments is that DCA’ing over long periods of time might be a solid approach to crypto. Maybe.
To both old-timers and newcomers: thanks so much for taking the time to read and for supporting the Top Ten Crypto Index Fund Experiments. I hope you find the updates helpful in terms of perspective as you navigate the crypto landscape. Be careful out there and don’t put your mental, physical, or financial health at risk chasing gainz. If crypto is causing you to lose sleep at night, chances are you have too much in crypto: try to think long term, don’t invest what you can’t afford to lose.
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, 2020, and most recently, January 1st, 2021.
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