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Month Nine – UP 333%
The 2021 Top Ten Crypto Index Fund consists of: BTC, ETH, USDT, XRP, Litecoin, DOT, BCH, ADA, BNB, and LINK.
September highlights for the 2021 Top Ten Portfolio:
- Following its first all green month since February 2021, the portfolio finished the month 100% in the red
- ADA retains the lead, but second place BNB makes up ground in September.
September Movement Report, Ranking, and Dropouts
Surprisingly, there wasn’t much movement this month with the 2021 Top Ten:
Downs:
- Bitcoin Cash – down 4 places (#14–>#18)
- Chainlink – down 3 places (#12–>#15)
Top Ten dropouts since January 2021: Nine months into the 2021 Top Ten Experiment, three cryptos have dropped out: Chainlink, Litecoin, and Bitcoin Cash. They have been replaced by SOL, DOGE, and USDC.
September Winners and Losers
September Winners – Besides Tether, DOT had the least bad month, finishing September down only -2%.
September Losers – All coins were in the red, but ADA had the worst month, losing -26%.
Tally of Monthly Winners and Losers
Nine months into the Experiment, here’s where we stand in terms of the 2021 Top Ten Portfolio’s monthly winners and losers:
ADA is in the lead with three monthly victories. ADA is also tied with UST for most losses. Swing trade anyone?
Overall Update – ADA in front, BNB in second place, all cryptos in green.
Despite a tough September, Cardano has managed to maintain its lead over Binance Coin, preventing yet another flip for first place. Both cryptos have had a very strong 2021 up +1,144 and +976% respectively.
The $100 investment into first place ADA nine months ago is now worth $1,243.
Besides Tether, Litecoin is the worst performing cryptocurrency of the 2021 Top Ten Portfolio, up only +29% in 2021.
Total Market Cap for the Entire Cryptocurrency Sector:
The total crypto market lost about $108B in September, settling at just over $2.1T. As a sector, crypto is up +173% in the nine month lifespan of the 2021 Top Ten Experiment.
You may notice that the 2021 Top Ten Portfolio is returning a little over double the overall crypto market cap (+333% vs. +173%) so far in 2021.
This is a bit of an outlier: the rest of the Top Ten Experiments are well behind what the overall market has returned in their respective time frames. Although the 2021 Top Ten approach has held up quite well compared to the overall market so far, I expect to see it fall behind eventually, like the other experiments.
Crypto Market Cap Low Point in the 2021 Top Ten Crypto Index Experiment: $775B in January 2021.
Crypto Market Cap High Point in the 2021 Top Ten Crypto Index Experiment: $2.22T last month.
Bitcoin Dominance:
BitDom bounced slightly in September, up to 43.2% compared to 42% in August. This is still at the low end of the range when looking at the 2021 timeframe as a whole.
BitDom Low Point in the 2021 Top Ten Crypto Index Experiment: 41.9% in May 2021.
BitDom High Point in the 2020 Top Ten Crypto Index Experiment: 70.4% in January 2021.
Overall return on $1,000 investment since January 1st, 2021:
The 2021 Portfolio lost nearly $894 in August. Overall, the 2021 Top Ten Portfolio is up +333%, the initial $1000 investment on New Year’s Day 2021 worth $4,330.
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:
The 2021 Top Ten Portfolio has had 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 crypto bull run. Where do we stand if we combine four years of the Top Ten Crypto Index Fund Experiments?
- 2018 Top Ten Experiment: up +46% (total value $1,460)
- 2019 Top Ten Experiment: up +510% (total value $6,098)
- 2020 Top Ten Experiment: up +731% (total value $8,309)
- 2021 Top Ten Experiment: up +333% (total value $4,330)
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 $20,197 ($1,460 + $6,098 + $8,309 + $4,330).
That’s up +405% when you put all four Top Tens together.
Here’s a table to help visualize the progress of the combined portfolios:
That’s a +405% gain by investing $1k into the cryptos that happened to be in the Top Ten on January 1st, 2018, 2019, 2020, and 2021.
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. For the first time in nearly a year, the S&P 500 did not reach another month end all time high in September:
The S&P 500 Index is up 16% in 2021. The initial $1k investment I put into crypto nine months ago would be worth $1,160 had it been redirected to the S&P 500.
The 2021 Top Ten Crypto Portfolio is up +333% over the same time period – the initial $1k investment in crypto nine months ago is now worth $4,330.
That’s a difference of $3,170 on a $1k investment in nine 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 = $1,630 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1,740 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1,350 today
- $1000 investment in S&P 500 on January 1st, 2021 = $1,160 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 $5,880 ($1,630 + $1,740 + $1,350 + $1,160)
That’s up +47% since January 2018 compared to a +405% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of 358% 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.
Conclusion:
The 2021 Top Ten Crypto Portfolio is up +333% since the beginning of the year and the only Top Ten Portfolio to outperform the overall market. Q3 is historically a down month for crypto – how high can this portfolio reach by the end of the year?
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 these reports will help prepare you for the highs and lows that await 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, 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 January 1st, 2020.
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Hi! Wow! I am inspired by this experiment, never though of this but just buying BTC or ETH and hold it or stake it, but with more Alt coins coming up, no harm looking at them as well but just too many and not sure which is worth looking at. This is a total gamechange, so laser focus and guided, most importantly easy to manage and execute!
Just curious, what if 1 of the coins got bum out of the top 10 list for the month or year, do you drop it, sell it and get the the newly promoted ones?
I am definitely gonna give this a try!
Great, I’m happy to inspire!
To answer your question, for the purpose of the Experiment, I just hold, even if they drop out of the Top Ten. I’ve thought of doing as you suggest, but it can be very different depending on the year. For example, after the first year, the coins that had dropped out of the Top Ten were worth almost nothing, so I just didn’t bother. In an up year, I like the approach as the coins would still be in the green, even if they fell in the rankings.
Another idea for indexing is to look into DeFi. There are some amazing things possible these days, including indexes. The one that I’m most familiar with is a synthetic asset called TCAP (Total Crypto Market Cap) which tracks the entire crypto currency space. As you can see on my Experiments, over the long term, my Top Ten Portfolio underperforms the returns of the entire market cap – which makes sense, because there are always new projects being added to crypto everyday, which bumps up the entire crypto market. Check it out if you’re interested in gaining exposure to the all of crypto at once: https://cryptex.finance/
Awesome, so do you inject fresh funds every month? $1,000 every month or just stick with the initial $1,000 and just let it let it compound?
No, I’m even lazier than that! Just $1,000 one time per year, on January 1st. I simply hold, gain interest by staking, letting it compound if possible. Then repeat next New Year’s Day. In a few days, I’ll make my $1,000 purchase into the new Top Ten.
I like fuss free, just do it 1x effort and leave it there too! Call it lazy for some, but there are so many things to do in life and can’t possibly monitor it all the time. Do you reference the top10 from CoinMarketCap? Cool! Am excited to also test it out!
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