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Month Nineteen – UP 552%
After experiencing the first two back to back red months since the 2020 Top Ten Experiment began, the 2020 Portfolio recovered a bit in July. Nearly all cryptos in the group had at least modest gains, with just BSV losing value.
The 2020 Top Ten Portfolio 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).
This group of cryptos also highlights the benefits of an index fund strategy: the +552% return of the 2020 Top Ten Portfolio has outperformed eight of the individual component cryptos contained within the Index. Only by guessing right and throwing all your eggs into Ethereum and/or Binance Coin would you have performed better than spreading out the risk, index style.
July Movement Report, Ranking, and Dropouts
For a mostly green month, there was a surprising amount of downward movement this month:
- XRP – up one place (#7–>#6)
- Tezos – down seven places (#36–>#43)
- EOS – down two places (#27–>#29)
- Litecoin – down one place (#14–>#15)
- BSV – down nine places (#31–>#40)
Top Ten dropouts since January 2020: after nineteen months, half of the cryptos that started in the Top Ten have dropped out: EOS, BSV, Tezos, Litecoin, and Bitcoin Cash have been replaced by Cardano, Polkadot, UNI, Doge, and USDC.
EOS is out of the Top Twenty, BSV out of the Top Thirty, and Tezos fell out of the Top Forty this month.
July Winners and Losers
July Winners – ETH (+21%) outperformed the field this month followed closely by Bitcoin (+19%).
July Losers – Loser, singular this month: although only losing -2% of its value, BSV was the only crypto in the 2020 Top Ten to finish in the red in July.
Tally of Monthly Winners and Losers
After nineteen months, here’s a snapshot of the 2020 Top Ten Experiment’s monthly winners and losers:
With five monthly victories, ETH leads the pack. Tether has the most monthly losses, a good sign for the 2020 Top Ten Portfolio (although BSV is starting to catch up in the loss column).
Overall Update – BNB in the lead, 100% of cryptos in positive territory, 2020 Top Ten best performing of the four Experiments
The 2020 Top Ten continue to lead the rest of the Top Ten Crypto Experiments. 70% of the cryptos in this group are up at least triple digits and Ethereum and Binance Coin are up quadruple digits.
The initial $100 investment nineteen months ago into first place Binance Coin? Currently worth $2,367, an increase of +2,266%.
In second is Ethereum, also with quadruple digit gains, up +1,884%.
Besides USDT, the worst performer in the 2020 group is BSV, up +44% since January 2020.
Total Market Cap for the Entire Cryptocurrency Sector:
The total market cap added about $223 billion in July, finishing the month at nearly $1.6T. As a sector, crypto is up +743% over the nineteen month lifespan of the 2020 Top Ten Experiment.
If you were able to capture the entire crypto market since January 2020 (+743%), you’d be doing quite a bit better than the Experiment’s Top Ten approach (+552%) and much, much better than the S&P (+36%) over the same time period. Much more on the S&P below.
The Top Ten index fund strategy has done pretty well up to this point in the experiment: it 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 approach.
Low Point in the 2020 Top Ten Crypto Index Experiment: $185B in May 2020.
High Point in the 2020 Top Ten Crypto Index Experiment: $2.2T in April 2021.
BitDom continued to gain this month, ending July at 46.6%. As the fancy new chart above shows, this is still very near the bottom: out of nineteen months, Bitcoin Domination was only lower two months ago.
Low Point in the 2020 Top Ten Crypto Index Experiment: 42% in May 2021.
High Point in the 2020 Top Ten Crypto Index Experiment: 70% in December 2020.
Overall return on $1,000 investment since January 1st, 2020:
The 2020 Top Ten Portfolio picked up $836 in July and is now worth $6,524 (+552%) from the initial $1k investment. For some context, this portfolio was worth $10,5236 just three months ago).
The 2020 Portfolio remains 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:
The portfolio has yet to experience a red month, although 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 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 portfolios, which is back near the returns in March.
Lost in the numbers? Here’s a table to help visualize the progress of the combined portfolios:
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 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 still well in the lead and the 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 $46,038. That’s up +1051%.
In second place, going all in on Bitcoin with $4,000 USD would have yielded +417%, turning the initial $4k investment into $20,670.
And close third place? The Top Ten Index Fund approach with +294%! Watch your back, BTC!
As you might expect (as indexes are designed to mitigate risk), the +294% 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 +91%.
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 with traditional markets. The S&P reached yet another all time high, something we’ve seen again and again this year. It has now returned +36% since January 1st, 2020.
That same $1k I put into crypto in January 2020 would be worth $1360 had it been redirected to the S&P 500 instead.
Crypto over the same time period? The 2020 Top Ten Crypto Portfolio is returning +552%. The initial $1k investment in crypto is now worth $6,524.
That’s a difference of $5,164. 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 = $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
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 $5,920 ($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 246% 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 after a rough few months, that’s ten straight monthly wins for crypto.
After an eternity of downward or crab movement (eternity in crypto=two months) it looks like crypto has resumed its upward trajectory. Could this all change tomorrow? Absolutely. But if you believe that crypto is here to stay, I invite you to zoom out with the data contained in these updates: all looks pretty good when you look at the big picture.
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, try to 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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