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Month Eleven – Down -76%
The 2022 Top Ten Crypto Index Fund Portfolio is BTC, ETH, BNB, Solana, ADA, USDC/UST, XRP, LUNA/LUNC, DOT, AVAX.
November highlights for the 2022 Top Ten Portfolio:
- An all red month, thanks mainly to FTX’s implosion.
- BNB is in the lead, followed by second place XRP.
- The 2022 Top Ten Portfolio is the worst performing of the five Top Ten experiments
November Ranking and Dropouts
Here’s a look at the movement in ranking eleven months into the 2022 Top Ten Index Fund Experiment:
AVAX, SOL, and LUNC have dropped out, replaced by BUSD, DOGE, and MATIC.
November Winners and Losers
November Winners – No winners this month, although BNB’s -9% return outperformed the field.
November Losers – SOL suffered this month, losing over half of its value (-56%), easily turning in the worst performance of the month.
Overall Update: BNB increases lead over second place XRP. 100% of cryptos in negative territory. LUNC worst performing in the 2022 Portfolio and worst performing crypto of all the Top Ten Experiments.
After being flipped by XRP in September, BNB held and expanded its lead this month. Although still down -44%, it has weathered the FTX storm better than most cryptos.
LUNC remains at the bottom, worth a fraction of a cent. The initial $100 invested in Luna eleven months ago is worth $0.0002 today – the worst performance of any coin in any of the five Top Ten Experiments
Overall return on $1,000 investment since January 1st, 2022:
The 2022 Top Ten Portfolio lost -$52 this month. The initial $1000 investment on New Year’s Day 2022 is now worth $240.
Here’s a visual summary of the progress so far:
As you can see, the value has remained within a tight range since May.
The 2022 Portfolio is the worst performing of the five Top Ten Crypto Portfolios.
Factoring in USDC Gains
New feature this year – In past Experiment years, I have not included stablecoin gains in the monthly reports, but there are opportunities to earn ROI using stables alone. I figured this would be especially interesting to track this year, depending on how the crypto market performs. My goal of this little side quest was to beat the ROI of as many of the non-stablecoin cryptos in the Experiment as possible.
I started the year using the most straightforward strategies, moving the $100 USDC around to get bonuses from different platforms. With crypto tanking, my ROI on stables was easily outperforming the rest of the portfolio. In May, I decided to do something a bit more interesting. My choice? Convert the USDC to UST, then deposit the UST on Anchor.
Seemed like a good idea at the time.
My UST is now worth $2.25.
Here’s a table of the USDC side mission so far this year. I’m down -98% overall.
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 5 years, including 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 TCAP for a bit of a friendly competition.
Here’s the question I’ve been 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?
TCAP snapshot December 1st:
- The 2022 Top Ten Portfolio: -18%
- TCAP: -29%.
The November monthly victory goes to: The Top Ten Crypto Index Fund Experiment Portfolio
Overall since January 1st, 2022:
- The 2022 Top Ten Portfolio: current value $240 (-76%)
- TCAP: current value $311 (-69%)
Overall lead: Cryptex’s Total Crypto Market Cap (TCAP) token
Visual summary below:
TCAP’s outperformance of an equally weighted Top Ten Portfolio is in line with what the Experiment has observed over the five years of its existence: with the exception of the 2021 Portfolio, every year the Total Market Cap outperforms a Top Ten approach. And if history is any indication, I expect the 2021 Top 10 to fall behind TCAP eventually. Here are the figures, as of 1 December 2022, with the five entry points:
Buying the Top Ten at equal weight in Jan 2018: down -55% vs. +48% for the total crypto market cap.
Starting in Jan 2019? +141% for the Top Ten vs. +570% for the Total Market Cap.
Starting in Jan 2020? +303% for the Top Ten vs. +349% for the Total Market Cap.
Starting in Jan 2021? +65% for the Top Ten vs. +10% for the Total Market Cap.
Starting in Jan 2022? -76% for the Top Ten vs. -61% Total Market Cap.
BitDom ended November at 38.1%. For context, there hasn’t been much movement on this metric so far in 2022. Chart below:
For those just getting into crypto, it’s worth paying attention to the Bitcoin dominance figure, as it can signal appetite for altcoins vs. BTC.
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: down -55% (total value $453)
- 2019 Top Ten Experiment: up +141% (total value $2,405)
- 2020 Top Ten Experiment: up +303% (total value $4,031) (best performing portfolio)
- 2021 Top Ten Experiment: up +65% (total value $1,652)
- 2022 Top Ten Experiment: down -76% (total value $240) (worst performing portfolio)
Taking the five portfolios together, here’s the bottom bottom bottom bottom bottom line:
After a $5,000 total investment in the 2018, 2019, 2020, 2021, and 2022 Top Ten Cryptocurrencies, the combined portfolios are worth $8,781.
That’s up +76% on the combined portfolios. The peak for the combined Top Ten Index Fund Experiment Portfolios was November 2021’s all time high of +533%. Here’s the combined monthly ROI since I started tracking the metric in January 2020 for those who do better with visuals:
In summary: That’s a +76% gain by investing $1k on whichever cryptos happened to be in the Top Ten on January 1st (including stablecoins) for five straight years.
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 -14% so far in 2022, so the initial $1k investment into crypto on New Year’s Day would be worth $860 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 = $1,530 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1,630 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1,260 today
- $1000 investment in S&P 500 on January 1st, 2021 = $1,090 today
- $1000 investment in S&P 500 on January 1st, 2022 = $860 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 $6,370.
That is up +27% since January 2018 compared to a +76% gain of the combined Top Ten Crypto Experiment Portfolios.
The visual below shows a comparison on ROI 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 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, and truly don’t invest what you can’t afford to lose. 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 two reports from me per month. November’s extended report is on the 2020 Top Ten Portfolio, which you can access here. You can check out the latest 2018 Top Ten, 2019 Top Ten, and 2021 Top Ten reports as well.
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