Tracking 2022 Top Ten Cryptocurrencies – One Year Report

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Month Twelve – Down -80%

The 2022 Top Ten Crypto Index Fund Portfolio is BTC, ETH, BNB, Solana, ADA, USDC/UST, XRP, LUNA/LUNC, DOT, AVAX.  

Year End highlights for the 2022 Top Ten Portfolio:

• Could you repeat the question?
• BNB claims first place after Year 1, down -53%, followed by second place XRP (-61%).
• The 2022 Top Ten Portfolio is the worst performing of the five Top Ten experiments, -80% so far.
• Surely the 2022 Portfolio had the worst start of any of the Top Ten Crypto Index Fund Experiments, right?  Nope – that distinction goes to the 2018 Top Ten Portfolio, which was -85% after its first year.

December Ranking and Dropouts

Here’s a look at the movement in ranking twelve months into the 2022 Top Ten Index Fund Experiment:

AVAX, SOL, DOT, and LUNC have dropped out, replaced by BUSD, DAI, DOGE, and MATIC.  

December Winners and Losers

December Winners –  No winners this month, although BTC’s -3% return outperformed the field.

December Losers – for the second month in row, SOL was the worst performer of the portfolio, losing more than a quarter of its value (-28%) after losing more than half of its value the month before.

Overall Update: BNB wins 2022 followed by second place XRP. All cryptos in negative territory. LUNC worst performing in the 2022 Portfolio and worst performing crypto of all the Top Ten Experiments.

What. A. Year.

In 2022, crypto victory means ending the year down “only” about half: BNB was the best performing of the Portfolio, finishing the year -53%. In distant second place was XRP (-61%), only then followed by the big boys: BTC and ETH fell -65% and -68%, respectively.

Ever since LUNC’s (then known as LUNA) crash in May, it has remained hopelessly at the bottom, worth a fraction of a cent.  The initial $100 invested in Luna twelve months ago is worth $0.0002 today – the worst performance of any coin in any of the five Top Ten Experiments.  It’s hard to remember/believe that LUNA was the highest performing Top Ten Crypto of the first quarter of the year. 

The 2022 Top Ten Portfolio is the worst performing of the five Top Ten experiments, -80% so far.

But – this is by no means the worst first year in the history of the Top Ten Crypto Index Fund Experiments.  That honor goes to the 2018 Top Ten Portfolio, which was -85% after its first year.

Overall return on $1,000 investment since January 1st, 2022:

The 2022 Top Ten Portfolio lost -$35 this in December and $795 since January.  The initial $1000 investment on New Year’s Day 2022 is now worth $205. 

Here’s a visual summary of the progress so far:

As you can see, there wasn’t a green month all year, although the 2022 Top Ten Portfolio flirted with the break even point in March and the value has remained within a tight range since May.  

Factoring in USDC Gains

New feature this year – In retrospect this was not my best idea: I was a bit bored of simply holding a stable in the Top Ten as I’ve been doing since 2019, and thought I’d showcase some of the possibilities available in crypto to build on a stablecoin holding.  My plan was to start nice and easy with trusted CeFi platforms, taking advantage of sign up bonuses, then moving to the safest of DeFi (Anchor) then get into some more advanced DeFi strategy.

It was going pretty well until May.

Then LUNA happened. My UST is now worth $2.02, down -98%.

Two out of the three platforms I used died.  On Nexo is still around.

I took this as a good reminder that anything can and does happen in crypto and to continue to be careful. I’m thankful that the lesson only cost me $100:  I know a lot of other people got hit much, much harder.

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 in 2022 to the Top Ten Experiments was 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?

So, one year later, we have an answer to that question!  TCAP snapshot January 1st: 

December Performances:

• The 2022 Top Ten Portfolio: -15% 
• TCAP: -9%.

The December monthly victory goes to: Cryptex’s Total Crypto Market Cap (TCAP) token 

Overall since January 1st, 2022: 

• The 2022 Top Ten Portfolio: current value $205 (-80%) 
• TCAP: current value $283 (-72%)

Overall winner is: Cryptex’s Total Crypto Market Cap (TCAP) token 

Visual summary below:

TCAP’s dominant victory (it’s been in the overall lead most of the year) is in line with what I expected and in line with the lessons learned from the Top Ten Experiments:  with the exception of the 2021 Portfolio, every year the Total Market Cap outperforms a Top Ten approach.   Here are the figures, as of 1 January 2022, with the five entry points:

• 2018 Top Ten Portfolio: -59% for the Top Ten vs. +38% for the total market cap
• 2019 Top Ten Portfolio: +126% for the Top Ten vs. +525% for the total market cap 
• 2020 Top Ten Portfolio: +251% for the Top Ten vs. +319% for the total market cap 
• 2021 Top Ten Portfolio:  +40% for the Top Ten vs. +3% for the total market cap (an outlier – if history is any indication, I expect the Top Ten gains to fall behind the Total Market Cap over time, like the other Experiments).
• 2022 Top Ten Portfolio: -80% for the Top Ten vs. -64% for the total market cap

Bitcoin Dominance:

BitDom ended the year at 40.1%. For context, we’re about back where we started in January and there hasn’t been much movement on this metric at all 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 -59% (total value $413)
• 2019 Top Ten Experiment: up +126% (total value $2,260)
• 2020 Top Ten Experiment: up +251% (total value $3,513) (best performing portfolio)
• 2021 Top Ten Experiment: up +40% (total value $1,402)
• 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 $7,828. 

That’s up +57% 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 +57% 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 -19% so far in 2022, so the initial $1k investment into crypto on New Year’s Day would be worth $810 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 = $1,440 today
• $1000 investment in S&P 500 on January 1st, 2019 = $1,530 today
• $1000 investment in S&P 500 on January 1st, 2020 = $1,190 today
• $1000 investment in S&P 500 on January 1st, 2021 = $1,020 today
• $1000 investment in S&P 500 on January 1st, 2022 = $810 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 $5,990.

That is up +20% since January 2018 compared to a +57% 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: 

Conclusion:

So, that’s it: the end to a crazy year.  Never a dull moment in crypto…

But the last section demonstrates, if you can stomach crypto’s volatility (a big if), you’ll find better overall returns over time in crypto vs. traditional markets – at least at this point in the Experiment.

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.  December’s extended report is on the 2021 Top Ten Portfolio, which you can access here.  You can check out the latest 2018 Top Ten, 2019 Top Ten, and 2020 Top Ten reports as well.

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