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Month Five – UP 281%
May Movement Report, Ranking, and Dropouts
Seven out of the ten cryptos made a move this month, most to the downside:
- Cardano – up three places (#7–>#4)
- Tether – up two places (#5–>#3)
- Binance Coin – down two places (#3–>#5)
- Polkadot – down one place (#8–>#9)
- 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 2021: Five months into the 2021 Top Ten Experiment, three cryptos have already dropped out: Chainlink, Litecoin, and most recently Bitcoin Cash. They have been replaced by UNI, DOGE, and USDC.
May Winners and Losers
May Winners – There was just one winner this month: Cardano, up a strong +33% while the other cryptos bled.
May Losers – Binance Coin had a rough month, shedding -40% of its value in May. BTC and XRP were the second worst performing cryptos, both down about -36%.
Tally of Monthly Winners and Losers
After five months, here’s where we stand in terms of the 2021 Top Ten Experiment’s monthly winners and losers:
Overall Update – ADA flips BNB for the lead, all cryptos in green, Bitcoin worst performing.
ADA’s strong month coincided with BNB’s no good, very bad month resulting in a flip: for the first time since February, Cardano is back in the lead.
The $100 bucks I invested into ADA five months ago is now worth $977.
Besides Tether, Bitcoin is the worst performing cryptocurrency of the 2021 Top Ten Portfolio – although it still has an ROI of +24% after five months, double that of the S&P over the same time period (see below for details).
Total Market Cap for the Entire Cryptocurrency Sector:
After passing the $2 trillion dollar mark last month, the crypto finished May around the $1.6T mark. The total market cap is up +112% since the beginning of the year, not keeping up with the 2021 Top Ten Portfolio’s +281%. If history is any indication, this won’t be the case for too much longer: the rest of the Top Ten Experiments are well behind the market cap in their respective time periods.
BitDom continued to decline in May, now at a new 2021 Top Ten Portfolio low of 42%.
To see what happened last time Bitcoin dominance was at similar levels, you’d have to go back to the early months of the 2018 Top Ten Experiment. Spoiler alert: this was when the crypto market was imploding, kicking off the years long bear market we’ve only recently emerged from.
Overall return on $1,000 investment since January 1st, 2021:
The 2021 Portfolio lost $1,118 in May. Overall, the 2021 Top Ten Portfolio is up +281%, the initial $1000 investment on New Year’s Day 2021 worth $3,809.
Here’s the month by month ROI of the 2021 Top Ten Experiment, to give you a sense of perspective and provide an overview as we go along:
A very strong first few months for the 2021 Top Ten Portfolio – and the best start, by far, of any of the four Top Ten Crypto Experiments.
Combining the 2018, 2019, 2020, and 2021 Top Ten Crypto Portfolios
As most readers are aware, this is the fourth year of an Experiment I started back in January of 2018, at the height of the last bull run. 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.
Here’s a table to help visualize the progress of the combined portfolios:
That’s a +349% gain by investing $1k into the cryptos that happened to be in the Top Ten on January 1st, 2018, 2019, 2020, and 2021.
Top Ten Index vs. Top Three Index
Inspired by a suggestion from one of our blog readers, let’s take a look at how the 2021 Top Ten approach would compare to just focusing on the Top Three.
I crunched the numbers, and to make it more interesting, I removed Tether from the index and pulled #4 into the Top Three.
A Top Three Index (minus Tether, plus XRP) would mean $333 into BTC, ETH, and XRP.
Down quite a bit from last month, but a hypothetical Top Three Index would be worth $3,061, returning +206%. That’s compared to the $3,809 (+281%) of the 2021 Top Ten.
At this point in the 2021 Experiment, it would have been better to go with a Top Ten Index approach instead of focusing on the Top Three.
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 had modest gains in May, but it was enough to notch yet another all time high:
The S&P 500 Index is up 12% in 2021. The initial $1k investment I put into crypto five months ago would be worth $1,120 had it been redirected to the S&P 500.
The 2021 Top Ten Crypto Portfolio is up +281% over the same time period. Five months in, the initial $1k investment in crypto is now worth $3,809.
That’s a difference of $2,689 on a $1k investment in just five months.
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 = $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
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.
Saved by Cardano from a dreaded all-red month, the 2021 Top Ten Portfolio continues to perform well. Despite a chaotic May, this group of ten cryptos is up +281% since the beginning of the year. As we approach the summer months, we should start to see if the bull run has any life left in it or if we should start preparing for another extended downturn.
To the long time followers of the Top Ten Experiments, thank you so much for sticking around so long. For those just getting into crypto, I hope this content can somehow help you see the highs and lows of what might await you on your crypto adventures. Buckle up, go with the flow, 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 January 1st, 2020.
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