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Month Five – Down -66%
The 2022 Top Ten Crypto Index Fund Portfolio is BTC, ETH, BNB, Solana, ADA, USDC, XRP, LUNA, DOT, AVAX.
May highlights for the 2022 Top Ten Portfolio:
- Terra/Luna meltdown cuts 2022 Top Ten Portfolio value over half in one month.
- No winners this month and LUNA falls -100%, unprecedented during the 4.5 year lifespan of of the Experiments
May Ranking and Dropouts
Here’s a look at the movement in the ranks five months into the 2022 Top Ten Index Fund Experiment:
AVAX and Luna have dropped out of the Top Ten, replaced by BUSD and DOGE (such wow). Luna fell more than two hundred positions in the rankings in May.
For context, since 2018 no other coin that has started the year in the Top Ten has fallen more than Luna. Second place would be NEM from the 2018 Top Ten, ranked #88 as of the latest update.
May Winners and Losers
May Winners – None. For the second month in a row, BNB (-22%) fell the least.
May Losers – All of the Top Ten cryptos. Luna (-100%) had the worst performing month in the 4.5 year history of the Top Ten Experiments.
Overall Update: Terra/Luna implode, BTC best performer, BNB in second place
In one month, LUNA went from best performing crypto in the 2022 Top Ten Portfolio to -100%. In terms of individual performance, this is completely without precedent: since starting the Top Ten Experiments in January 2018, no other crypto has imploded this quickly. Yes, NEM and Dash from the 2018 Top Ten are down bad (both around -95%), but this has been a slow bleed over 4.5 years. A Top Ten crypto like Luna going to zero practically overnight is a first for the Experiments. The initial $100 invested in Luna just five months ago is worth $0 today.
Bitcoin, down -36% this year, is the best performing of the Top Ten. BNB (-41%) is second place, followed by ETH (-51%).
Overall return on $1,000 investment since January 1st, 2022:
After dropping $214 in April, the 2022 Top Ten Portfolio lost another $420 in May. The initial $1000 investment on New Year’s Day 2022 is now worth $342, down two-thirds of its value just five months ago.
Here’s a visual summary of the progress so far:
The 2022 Top Ten Cryptos are still the worst performing of the five Portfolios.
Factoring in USDC Gains
New feature this year – In past Experiment years, I have not included stablecoin gains in the monthly reports. These days, there are opportunities to earn ROI using stables alone. I figured this would be especially interesting this year, depending on how the crypto market performs. 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.
Convert the USDC to UST, then deposit the UST on Anchor.
Seemed like a good idea at the time.
Chasing that sweet, sweet, 18% yield.
My UST is now worth $1.60.
Here’s a table of the USDC side mission so far this year. I’m down -99% in May, and -99% 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 4.5 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 TCAP 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?
May: Both the TCAP token and the 2022 Top Ten Portfolio fell significantly this month, but the damage to the Top Ten portfolio was more severe: the 2022 Top Ten dropped -55% in May and TCAP fell -36%
TCAP snapshot June 1st:
The May monthly victory goes to the TCAP.
Overall: The 2022 Top Ten Portfolio is currently worth $342 (-66% from January 1st, 2022) which places it below TCAP’s $460 (-54% from January 1st, 2022) value. TCAP takes the overall lead as well. Visual below:
BitDom continued to increase this month, ending May at 46.1%. 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 signals the 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 -32% (total value $683)
- 2019 Top Ten Experiment: up +238% (total value $3,376)
- 2020 Top Ten Experiment: up +381% (total value $4,808) (best performing portfolio)
- 2021 Top Ten Experiment: up +99% (total value $$1,991)
- 2022 Top Ten Experiment: down -66% (total value $342)
Taking the five portfolios together, here’s the bottom bottom bottom bottom bottom line:
After five annual $1k investments ($5,000 total) in the 2018, 2019, 2020, 2021, and 2022 Top Ten Cryptocurrencies, the combined portfolios are worth $11,200.
That’s up +124% 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 +124% 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 = $1,640 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1,270 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 $6,390.
That is up +28% since January 2018 compared to a +124% 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 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, and truly 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. May’s extended report is on the 2018 Top Ten Portfolio, which you can access here. You can check out the latest 2019 Top Ten, 2020 Top Ten, and 2021 Top Ten reports as well.
Help keep the lights on at the Top Ten Crypto Index Fund Experiments.