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Month Eight – UP 83%
By the slimmest of margins, the 2020 Top Ten Portfolio has reclaimed its status as the best performing of the Top Ten “Index Fund” Experiments. ETH had a great month, up +32% and all cryptos were in the green except the forks.
Question of the month:
In August, which socialite sold a drawing of her cat for $17,000 worth of Ethereum?
A) Ivanka Trump
B) Paris Hilton
C) Kim Kardashian
D) That other one
Scroll down for the answer.
Ranking and August Winners and Losers
Despite another strong month overall, most of our 2020 Top Ten Cryptos either held steady or lost ground. XRP, BCH, and EOS each fell one position to #4, #6, and #12. BSV dropped two spots from #6 to #8. Heading the other direction, stablecoin Tether ended August climbing back up to #3.
August Winners – ETH backed up July‘s massive +55% gain with another very solid month, finishing August up +32%. Tezos finished in second place, +15% on the month.
August Losers – BSV and BCH were the worst performing of the 2020 Top Ten Portolio, down -17% and -9% respectively
Since COVID-19 has hammered the sporting world, let’s be overly competitive and pit these cryptos against themselves, shall we? Here’s a table showing which cryptos have the most monthly wins and losses at this point in the experiment. With its second straight win ETH is now in the lead with three monthly Ws. On the other hand, BSV, even though it is up +100% since January 1st, 2020, has been the worst performing crypto of the bunch four out of the first eight months so far this year.
Overall update – ETH far out in front, followed Tezos. 100% of Top Ten are in positive territory.
Ethereum pulled farther ahead this month and now is up +266% on the year. Thanks to a strong month for Tezos and a week month for BSV, Tezos has now overtaken BSV for second place, up +158% in 2020. Discounting Tether (no offense Big-T), BCH (+32%) is now the worst performing cryptocurrency of the 2020 Top Ten portfolio. 100% of the cryptos in this group are in positive territory.
Total Market Cap for the cryptocurrency sector:
The overall crypto market gained almost $43B in August, ending the month up +104% since the beginning of this year’s experiment in January 2020.
BitDom finally saw significant movement in August: it fell to 56.8%, the lowest level of the year. This of course signals a greater appetite for altcoins. The range up to this point in the year has been roughly 57% to 68%.
Overall return on investment since January 1st, 2020:
After an initial $1000 investment, the 2020 Top Ten Portfolio is now worth $1,825, up +82.52%. It is back to being the best performing of the three Top Ten Crypto Index Fund Portfolios, but by the smallest of margins: the 2019 group came in at +82.51% in August.
Here’s the month by month ROI of the 2020 Top Ten Experiment, hopefully helpful to maintain perspective and provide an overview as we go along:
Even during the zombie apocalypse blip in March, the 2020 Top Ten managed to end every month so far in the green (for a mirror image, check out the all red table you’ll in the 2018 experiment). The range of monthly ROI for the 2020 Top Ten has been between a low of +7% in March and high of +83% in August.
So, how does the 2020 Top Ten Experiment compare to the parallel projects?
- 2018 Top Ten Experiment: down -71% (total value $287)
- 2019 Top Ten Experiment: up +82.51% (total value $1,825)
Taken together, here’s the bottom bottom bottom line:
After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, my combined portfolios are worth $3,937 ($287+ $1,825 +$1,825).
That’s up about +31% for the three combined portfolios. It also marks the highest ROI of the three combined portfolios since I started keeping track in January 2020. The previous high was last month‘s +23%.
Lost in the numbers? Here’s a table to help visualize the progress of the combined portfolios:
That’s a +31% gain by buying $1k of the cryptos that happened to be in the Top Ten on January 1st, 2018, 2019, and 2020.
But what if I’d gone all in on only one Top Ten crypto for the past three years? While most have come and gone over the life of the experiment, five cryptos have remained in Top Ten for all three years: BTC, ETH, XRP, BCH, and LTC. Let’s take a look at those five:
At this point in the Experiments, Ethereum (+160%) would have easily returned the most, followed by BTC (+93%). On the other hand, following this approach with XRP, I would have been down -17%.
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. The S&P continued its recovery and set an all time high in August. It is now up +9% in 2020.
Over the same time period, the 2020 Top Ten Crypto Portfolio is returning about +83%. The initial $1k investment in crypto is now worth about $1,825. That sane $1k I put into crypto in January 2020 would be worth $1090 had it been redirected to the S&P 500 instead. That’s a $735 difference on a $1k investment, the largest gap in favor of crypto all year.
But that’s just 2020. What if I invested in the S&P 500 the same way I did during the first three 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: +$310
- $1000 investment in S&P 500 on January 1st, 2019: +$400
- $1000 investment in S&P 500 on January 1st, 2020: +$90
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 $3,800.
That $3,800 is up over +27% since January 2018, compared to a +31% gain of the combined Top Ten Crypto Experiment Portfolios over the same period of time.
For the second month in a row, the better overall investment would be (drum roll please): the Top Ten Crypto Portfolios!
As you’ll see in the table below, this is only the second time since I started recording this metric that crypto has outperformed a hypothetical identical investment in the S&P.
August was the second straight strong month in crypto and the 2020 Top Ten continue to do very well compared to traditional markets. As I’m putting together these reports, both crypto and traditional markets are diving, but these Experiments are great for a bit of perspective: there is no question that crypto has been a better investment than traditional markets so far this year. It’s not even close. How the rest of the year will develop is another question entirely, stay tuned and buckle up.
Stay healthy and take care of yourselves out there. Or better yet, just pop some popcorn and enjoy staying in.
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 2019 Top Ten Experiment follow up experiment.
And the Answer is…
B) Paris Hilton
At an auction in August, Paris Hilton sold a portrait of her cat that fetched 40 ETH, about $17,000 at the time. She donated the proceeds of the sale to charity.
Help keep the lights on at the Top Ten Crypto Index Fund Experiments.