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Month One – Down -24%
Welcome to the first monthly update of the brand new 2022 Top Ten Crypto Index Fund Experiment!
If you want more details on how/where I purchased these cryptos or have any general questions on the Experiment as a whole, feel free to check out my announcement post, otherwise, let’s jump in to the first update. Let’s go!
The 2022 Top Ten Crypto Index Fund Portfolio is BTC, ETH, BNB, Solana, ADA, USDC, XRP, LUNA, DOT, AVAX
January highlights for the 2022 Top Ten Portfolio:
- A rough start for the 2022 Top Ten Portfolio, down nearly one quarter by the end of January.
- USDC is the only crypto in the green
- Traditional markets drop as well, but not nearly as much as crypto
January Ranking and Dropouts
Here’s a look at the movement in the ranks one month into the 2022 Top Ten Index Fund Experiment:
A bit of internal shuffling, but not a whole lot of movement in January.
January Winners and Losers
January Winners – Since crypto was down this month, an easy victory for USDC. Plus I was able to make about +16% on bonuses and interest (more on that below).
January Losers – LUNA got hammered in January, losing about -41% of its value.
Overall Update – Bloody start to 2022: 90% of Top Ten in the red.
In stark contrast to January 2021, this year is off to a very shaky start. Never a good sign when first place for the month is a stablecoin (USDC).
LUNA is at the bottom, down -41% in one month. The initial $100 invested in LUNA thirty days ago is worth $59 today.
Factoring in USDC Gains
New feature this year! – In past years, I have not included the ROI that is possible with stablecoins in the monthly reports. These days, there are many ways to earn ROI using stables alone. I figure this may be especially interesting this year, depending on how the crypto market performs.
For the 2022 Top Ten Experiment, I will detail ways to build on the $100 USDC, starting with the most straightforward strategies. As we go along in the year, I will share increasingly advanced methods to increase USDC. My goal of this little side quest will be to beat the ROI of as many of the non-stablecoin cryptos in the Experiment as possible. A simple task if 2022 ends up being a bear year, a bit more difficult if the crypto market moons.
January – One of the easiest methods to capitalize on stables (or any crypto for that matter) is to take advantage of sign up bonuses of different platforms, many of which can be triggered with a small initial investment.
As detailed in the 2022 Top Ten Index Fund Announcement post, I purchased the $100 of USDC through BlockFi. I signed up using a promo code and received $10 in BTC, which I immediately converted to USDC. These codes are everywhere online (or just ask a friend).
Since the BlockFi Interest Account (BIA) is also paying 8.75% APY on stablecoins, the current running total on the $100 initial USDC purchase is: $110.64
There is another BlockFi promo code where you are able to receive $15 in BTC on $100, but this bonus can take up to three months. Going for the $15 bonus might make more sense once you’ve received bonuses from other platforms.
Something to be aware of: US-based BlockFi customers are not currently allowed to add funds to a BIA due to American regulations. BlockFi is currently in the SEC registration process to offer interest through BlockFi Yield, which will replace BIAs. Bonuses are still valid.
2022 Top Ten Portfolio vs. Total Crypto Market Cap Token (TCAP)
Another new feature this year! – The first Top Ten Crypto Experiment was started on 1 January 2018 in an attempt to capture the gains of the entire market. Much has changed in the last four+ years, including innovative Decentralized Finance (DeFi) projects that have created index tokens to capture segments of the crypto market (DeFi, the Metaverse, Blue Chips, etc.) instead of manually buying coins and tokens, like I do for my Experiments.
A project of particular interest to the Top Ten Experiments is the Total Crypto Market Cap (TCAP) token, created by Cryptex, which tracks the entire crypto market – exactly what my Top Ten Portfolios have been trying to recreate from the start.
I thought it would be interesting to compare my homemade 2022 Top Ten Crypto Index Fund Experiment to the TCAP token for a bit of a friendly competition. Here’s the question I’ll be tracking this year: would I have been better off with $1,000 of TCAP instead of going through the effort of creating a homemade $1,000 Top Ten Index Fund?
With most of crypto in the red, both the TCAP token and the 2022 Top Ten Portfolio got hit hard, down -20% and -24% respectively. In the end, Round 1 goes to Cryptex’s TCAP token. Visual below:
BitDom started 2022 at 40.2% and ticked up one percentage point in January, ending the month at 41.2%.
For those just getting into crypto, it’s worth paying attention to the Bitcoin dominance figure, as it signals the appetite for altcoins vs. BTC.
Overall return on $1,000 investment since January 1st, 2022:
Unlike the 2021 Top Ten Experiment (which was up +51% in its first month), the 2022 Portfolio is off to a rough start: the initial $1000 investment on New Year’s Day 2022 is now worth $762, down -24%.
Combining the 2018, 2019, 2020, 2021, and 2022 Top Ten Crypto Portfolios
So, where do we stand if we combine five years of the Top Ten Crypto Index Fund Experiments?
- 2018 Top Ten Experiment: up +4% (total value $1,035)
- 2019 Top Ten Experiment: up +364% (total value $4,639)
- 2020 Top Ten Experiment: up +577% (total value $6,766)
- 2021 Top Ten Experiment: up +201% (total value $3,009)
- 2022 Top Ten Experiment: down -25% (total value $747)
Taking the five portfolios together, here’s the bottom bottom bottom bottom bottom line:
After a $5,000 investment in the 2018, 2019, 2020, 2021, and 2022 Top Ten Cryptocurrencies, the combined portfolios are worth $16,196.
That’s up +224 on the combined portfolios.
For context, that is way up from one year ago (+127%) but way down from November’s all time high of +553%. To get a sense of the entire journey, here’s the combined monthly ROI since I started tracking the metric in January 2020:
That’s a +224% gain by buying $1k of the cryptos that happened to be in the Top Ten (including stablecoins) on January 1st, 2018, 2019, 2020, 2021, and 2022.
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 500 is down -5% so far in 2022, so the initial $1k investment into crypto on New Year’s Day would be worth $950 had it been redirected to the S&P.
Taking the same invest-$1,000-on-January-1st-of-each-year approach with the S&P 500 that I’ve been documenting through the Top Ten Crypto Experiments, the yields are the following:
- $1000 investment in S&P 500 on January 1st, 2018 = $1,700 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1,810 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1,410 today
- $1000 investment in S&P 500 on January 1st, 2021 = $1,210 today
- $1000 investment in S&P 500 on January 1st, 2022 = $950 today
Taken together, here’s the bottom bottom bottom bottom bottom line for a similar approach with the S&P:
After five $1,000 investments into an S&P 500 index fund in January 2018, 2019, 2020, 2021, and 2022 my portfolio would be worth $7,080.
That is up +42% since January 2018 compared to a +224% gain of the combined Top Ten Crypto Experiment Portfolios.
Here’s a fancy new chart showing a combined ROI comparison between a Top Ten Crypto approach and the S&P as per the rules of the Top Ten Experiments:
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!
A reporting note: I’ll focus on 2022 Top Ten Portfolio reports + one other portfolio on a rotating basis this year, so expect only two reports from me per month. This month’s extended report was on the 2018 Top Ten Portfolio, which is almost back down to break even point. Read all the gory details here.
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, January 1st, 2020, and most recently, January 1st, 2022.
Help keep the lights on at the Top Ten Crypto Index Fund Experiments.