Month Fourteen – UP 426%
Quite a month for the 2020 Top Ten Portfolio. Thanks to a ridiculously strong performance by Binance Coin in February, the 2020 Top Ten is now the best performing of the four Top Ten Experiments.
100% of this group is in the green overall. This portfolio now has two cryptos in quadruple digit price growth and five have seen at least triple digit price growth.
The 2020 Top Ten Portfolio’s +426% return has outperformed seven of the individual component cryptos contained within the Index while managing to make the S&P 500’s otherwise respectable +21% gain over the same period of time look paltry.
February Ranking, Movement Report, and Dropouts
Despite a great month for the 2020 Portfolio, only one crypto moved up in the rankings (three guesses which one). The rest were either stationary or moved downward, some with significant falls:
- BNB – up five places (#9→#4)
- Bitcoin Cash – down one place (#10→#11, and out of the Top Ten)
- Tether – down two places (#3→#5)
- XRP – down three places (#4→#7)
- EOS – down four places (#18→#22)
- BSV – down six places (#17→#23)
- Tezos – down seven places (#22→#29)
Top Ten dropouts since January 2020: in just over one year, 40% of the cryptos that started in the Top Ten have dropped out: EOS, BSV, Tezos, and most recently BCH have been replaced by Chainlink, Cardano, Polkadot, and Stellar.
Interestingly, that 40% dropout rate is the same as both the 2018 and 2019 Top Ten Portfolios. Two months in, the 2021 Top Ten Portfolio has only one drop out, but this is crypto: don’t expect that to hold for very long.
EOS and BSV have joined Tezos, falling out of the Top Twenty. XTZ’s current #29 rank places it below the worst performer of the 2019 Portfolio (Tron, at #24).
February Winners and Losers
February Winners – Binance Coin, by a ton, up almost +400% in one month. A distant second place, BTC gained +46% in February.
February Losers – Besides USDT, BSV had the weakest performance of the month, up only +2%.
Tally of Monthly Winners and Losers
After fourteen months, here’s a snapshot of the 2020 Top Ten Experiment’s monthly winners and losers:
With four monthly victories, ETH has doubled the wins of the tied for second place BTC, Tether, BNB, and Tezos. With another loss this month, Tether has the most monthly losses with six.
Overall Update – BNB leapfrogs ETH for lead, 100% of cryptos in positive territory, worst performer (EOS) up +47%.
February witnessed absolute hysteria for Binance Coin. It had a breakout month, catapulting from third to first place in the 2020 Top Ten. If you purchased BNB on January 1st, 2020, you would be up a staggering +1688%, the best performing crypto of all four Top Ten Crypto Experiments. And its performance in February elevated the entire 2020 Top Ten Portfolio, making it the best performing Experiment out of the four.
The initial $100 investment into first place BNB? Currently worth $1,789.
In second is Ethereum, also in the quadruple digit gains club (+1098%) followed by BTC, up +578%.
Besides Tether, EOS is the worst performing cryptocurrency of the 2020 Top Ten Portfolio. But its 47% gains are more than double the return of the stock market over the same period of time (see below).
Total Market Cap for the Entire Cryptocurrency Sector:
The overall market cap expanded massively in February. Nearly half a trillion dollars was added to the market in February and taken as a whole, the crypto market is up +709% over the fourteen month lifespan of the 2020 Top Ten Experiment. For the fifth month in a row, the month-end market cap has set new highs for the 2020 Top Ten Experiment.
Not much change for BTC dominance in February. Down from a record 2020 Top Ten high of 70.4% in December, the last few months have seen BitDom contract a bit, settling back down to the low 60s, a normal level for the 2020 Top Ten Experiment.
Or, to be exact, the BitDom range since the beginning of the experiment in January 2020 has been between 57.5% and 70.4%.
If you’re new to the space, keep an eye on this number: a high BitDom signals less of an appetite for altcoins and vice versa.
Overall return on $1,000 investment since January 1st, 2020:
The initial $1000 investment into the 2020 Top Ten Cryptos is now worth $5,264, up +426%. After falling significantly behind the 2019 Top Ten Portfolio, the 2020 Portfolio has regained the lead and is now the best performing of the four Experiments. More on that below.
Here’s the month by month ROI of the 2020 Top Ten Experiment, to give you a sense of perspective and provide an overview as we go along:
By a significant margin, +426% is the highest monthly ROI so far for the 2020 Top Ten. It has also not seen a red month yet.
The range of monthly ROI for the 2020 Top Ten has been between a COVID induced low of +7% in March 2020 and the new high this month of +426%.
Combining the 2018, 2019, 2020, and 2021 Top Ten Crypto Portfolios
So, where do we stand if we combine four years of the Top Ten Crypto Index Fund Experiments?
- 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)
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, a record high for the Top Ten Index Fund Experiment project, and up from +127% last month.
Lost in the numbers? Here’s a table to help visualize the progress of the combined portfolios:
That’s a +247% gain by buying $1k of the cryptos that happened to be in the Top Ten on January 1st, 2018, 2019, 2020, and 2021.
Top Ten Index Approach vs. All-In Approach
But what if I’d gone all in on only one Top Ten crypto for the past four years? While many have come and gone over the life of the experiment, five cryptos have started in Top Ten for all four years: BTC, ETH, XRP, BCH, and LTC. Let’s take a look:
Although Bitcoin gained a bit of ground in February, ETH is still the best “if-I-had-a-time-machine” choice at this point in the Experiments. As of today, $4,000 into Ethereum in $1k chunks on four consecutive New Year’s Days would be worth $27,794. That’s up +826%.
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, at +88%. But even that is more than double the return from traditional markets.
And the Top Ten Index Fund approach?
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, BTC, or LTC, but it is outperforming a hypothetical all-in investment in both XRP and BCH by a healthy margin.
So that’s the Top Ten Crypto Index Fund Experiments snapshot. Let’s take a look at how traditional markets are doing.
Comparison to S&P 500
I’m also tracking the S&P 500 as part of my experiment to have a comparison point to traditional markets. February saw yet another all time high for the S&P. The S&P has returned +21% since January 1st, 2020.
Overall these are very solid returns and probably more than would be expected during a pandemic. This more than doubles the 8% that financial planners use for predicted annual market returns.
Now scroll up for how it compares to crypto, or let me just make it easy for you: over the same time period, the 2020 Top Ten Crypto Portfolio is returning about +426%. The initial $1k investment in crypto is now worth about $5,264.
That same $1k I put into crypto in January 2020 would be worth $1210 had it been redirected to the S&P 500 instead.
That’s a $4,054 difference on a $1k investment, by far the largest gap in favor of crypto since the 2020 Top Ten Experiment began.
But that’s just 2020. What about in the longer term? What if I invested in the S&P 500 the same way I did during the first four years of the Top Ten Crypto Index Fund Experiments? What I like to call the world’s slowest dollar cost averaging method? Here are the figures:
- $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
So, 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 also compare against five individual coins (BTC, ETH, XRP, BCH, and LTC) by using the table above if you want. Spoiler: even the lowest performing crypto (XRP) is still returning double the S&P over the same time period.
To help provide perspective, here’s a quick look at the combined four year ROI for crypto vs. the S&P up to this point.
That’s five straight monthly wins and seven out of eight monthly victories for crypto.
No pullback in sight, just another huge month for crypto, and a huge month for the 2020 Top Ten Crypto Portfolio. How long and how hot this crypto bull market can run remains to be seen, but if the first two months of 2021 are any indication, it should be a wild ride.
To both new and long time Experiment followers: thanks so much for reading and for supporting the Top Ten Crypto Index Funds, 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 tracking the Top Ten cryptos as of January 1st, 2018 (the OG Experiment), January 1st, 2019, and most recently, January 1st, 2021.
For those just getting into crypto, 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!
Help keep the lights on at the Top Ten Crypto Index Fund Experiments.