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Month Seventeen – UP 630%
After reaching a new high in April, the 2020 Top Ten Portfolio hit a no-green wall in May. This month was the first all-red month since June 2020 (LINK).
Tough month aside, the 2020 Top Ten is still doing very well overall. Its value is the same as in April and it continues to be the best performing of the four Top Ten Crypto Index Fund Experiments. 100% of the 2020 cryptos are in positive territory, most have at least triple digit price growth and two cryptos in four digit growth territory (BNB and ETH).
And the Index Fund approach seems to be working out nicely with the 2020 Top Ten: the +630% return has outperformed eight of the individual component cryptos contained within the Index. It is also doing much better than the S&P 500 over the same period of time (more on that below).
May Movement Report, Ranking, and Dropouts
A lot of movement this month with 2020 Top Ten cryptos. All made a move except BTC and ETH.
- EOS – up three places (#26–>#23)
- Tezos – up three places (#38–>#35)
- Tether – up two places (#5–>#3)
- Binance Coin – down two places (#3–>#5)
- BSV – down six places (#28–>#34)
- Litecoin – down three places (#11–>#14)
- XRP – down three places (#4–>#7)
- Bitcoin Cash – down three places and out of the Top Ten (#10–>#13)
Top Ten dropouts since January 2020: after seventeen months, half of the cryptos that started in the Top Ten have dropped out: EOS, BSV, Tezos, Litecoin, and most recently Bitcoin Cash have been replaced by Cardano, Polkadot, UNI, Doge, and USDC.
EOS is out of the Top Twenty and XTZ and BSV are both out of the Top Thirty.
May Winners and Losers
May Winners – stablecoin Tether. EOS dropped only -3%, essentially breaking even for the month.
May Losers – BSV lost nearly half of its value, finishing the month down -46%. Binance Coin also had a rough May, dropping -40%.
Tally of Monthly Winners and Losers
After seventeen months, here’s a snapshot of the 2020 Top Ten Experiment’s monthly winners and losers:
With four monthly victories, ETH is still in the lead. Tether still has the most monthly losses, but BSV is starting to catch up.
Overall Update – BNB and ETH well in the lead, 100% of cryptos in positive territory, worst performer (BSV) up +77%.
The 2020 Top Ten continue to outpace the other Top Ten Crypto Experiments. Most cryptos are up at least triple digits. Ethereum and Binance Coin are up quadruple digits.
Frontrunner BNB gains since January 2020? The initial $100 investment into Binance Coin is currently worth $2,624, an increase of +2,523%.
In second is Ethereum, also with quadruple digit gains, up +1950%.
Besides USDT, the worst performer in the 2020 group is BSV. But even BSV’s +77% gains are over double those of the S&P over the same period of time (see below).
Total Market Cap for the Entire Cryptocurrency Sector:
Even though the total market cap lost $570 billion in May, it is up +765% over the seventeen month lifespan of the 2020 Top Ten Experiment. May’s dip did, however, break a seven streak of record market caps for the 2020 Top Ten Experiment.
If you were able to capture the entire crypto market since January 2020 (+765%), you’d be doing a bit better than the Experiment’s Top Ten approach (+630%) and much better than the S&P (+30%) over the same time period. The index fund strategy has outperformed eight of the ten individual cryptos held within the index. Only by guessing correctly on ETH or BNB would you have beaten the Top Ten Index Experiment’s approach.
Another big drop for BitDom in May – and this month’s 42% is the lowest level so far in the life of the 2020 Experiment. Second lowest? Last month.
Overall return on $1,000 investment since January 1st, 2020:
May saw a significant drop in the total value of the 2020 Top Ten portfolio: the initial $1000 investment is now worth $7,300, up +630% (this portfolio was worth $10,5236 just last month). Despite the dip, the 2020 Portfolio is still the best performing of the four Experiments.
Below is a 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:
+630% is down from last month’s record, but is still the second highest monthly ROI since the start of the 2020 Experiment. The portfolio has yet to experience a red month, but a little over a year ago in March 2020 it came close, returning a COVID induced low of +7%.
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 +26% (total value $1,264)
- 2019 Top Ten Experiment: up +459% (total value $5,594)
- 2020 Top Ten Experiment: up +630% (total value $7,300)
- 2021 Top Ten Experiment: up +281% (total value $3,809)
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 $17,967 ($1,264 + $5,594 + $7,300 + $3,809).
That’s up +349% on the combined portfolio. It’s a big drop from last month, but looking at the big picture, the combined portfolios are back to where they were two months ago in March.
Lost in the numbers? Here’s a table to help visualize the progress of the combined portfolios:
That’s a +349% gain by investing $1k on whichever cryptos happened to be in the Top Ten on January 1st for four straight years.
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 the Top Ten for all four years: BTC, ETH, XRP, BCH, and LTC. Let’s take a look:
ETH is well in the lead and the still best “if-I-had-a-time-machine” choice. As of today, $4,000 into Ethereum in $1k chunks on four consecutive New Year’s Days would be worth $47,562. That’s up +1089%.
In second place, going all in on Bitcoin with $4,000 USD would have yielded +377%, turning the initial investment into $19,089.
And close third place? The Top Ten Index Fund approach! Watch your back, BTC!
As you might expect (as indexes are designed to mitigate risk), the +349% gains of the Top Ten Index Fund approach fall somewhere in between the best and worst performers. The Top Ten strategy isn’t keeping up with ETH or BTC (yet) but it is outperforming a hypothetical all-in investment in both XRP, LTC, and BCH by a healthy margin.
Bitcoin Cash would have been the worst four year all-in bet, but you’d still be +144%.
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. May saw yet another all time high for the S&P, which has now returned +30% since January 1st, 2020.
Solid returns for a period of time largely dominated by a pandemic. This more than triples the 8%/year figure that many financial planners use for predicted annual market returns.
That same $1k I put into crypto in January 2020 would be worth $1300 had it been redirected to the S&P 500 instead.
Crypto over the same time period? The 2020 Top Ten Crypto Portfolio is returning +630%. The initial $1k investment in crypto is now worth $7,300.
That’s a difference of $6,000.
On a $1k investment!
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 since January 1st, 2018? 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 = $1570 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1680 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1300 today
- $1000 investment in S&P 500 on January 1st, 2021 = $1120 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 $5,670 ($1,570 + $1,680 + $1,300 + $1,120)
That is up +42% since January 2018 compared to a +349% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of 307% in favor of crypto.
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.
Even though May was a down month for crypto, overall that’s eight straight monthly wins for crypto.
After feeling unstoppable for months, the 2020 Top Ten Portfolio, along with the rest of crypto, took a big hit in May. Whether this turns out to be a temporary setback or the bull run is done remains to be seen. The next few months should be interesting, hold on to something/one.
For those who have supported the Experiments over the years, thank you. For those just getting into crypto, I hope these monthly reports can somehow help with perspective as you embark 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!
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.
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