The full blog post with all the tables is here.
Welcome to the monthly recap for the 3rd of 4 homemade Top Ten Crypto Index Funds. The 2020 Portfolio is made up of: Bitcoin, Ethereum, XRP, Tether, Bitcoin Cash, Litecoin, EOS, Binance Coin, BitcoinSV, and Tezos.
What’s this all about? I purchased $100 of each of Top 10 Cryptos in Jan. 2018, haven’t sold or traded, reporting monthly. Did the same in 2019, 2020, and 2021. Learn more about the Experiment history, rules, and FAQs (including the answer to the “WHY TETHER?!?!” question) here. Top Performer of July – Tezos (+79%) Overall since Jan. 2020 – BNB up +3,439% in 20 months, the best performing of any of the cryptos in any of the four Top Ten Experiments. Last place is BSV +74%. An ode to DCA: 2018+2019+2020+2021 Combined Top Ten Portfolios are returning +481%.
Month Twenty – UP 847%
The 2020 Top Ten Crypto Index Fund consists of: BTC, ETH, XRP, USDT, BCH, Litecoin, EOS, BNB, BSV, and Tezos.
August highlights for the 2020 Top Ten Portfolio:
First all green month since March 2021. All cryptos posted double digit gains this month and Tezos won the month.
This group of cryptos also highlights the benefits of an index fund strategy: the +847% return of the 2020 Top Ten Portfolio has outperformed eight of the individual component cryptos contained within the Index. Only by guessing right and throwing all your eggs into Ethereum and/or Binance Coin would you have performed better than spreading out the risk, index style.
August Movement Report, Ranking, and Dropouts
Only XTZ climbed in rank this month. The other cryptos maintained their positions or slid downward.
Tezos – up nine places (#43–>#34)
BSV – down six places (#40–>#46) EOS – down four places (#29–>#33) Bitcoin Cash – down two places (#12–>#14) Tether – down two places (#3–>#5) Litecoin – down one place (#15–>#16)
Top Ten dropouts since January 2020: after twenty months, half of the cryptos that started in the Top Ten have dropped out: EOS, BSV, Tezos, Litecoin, and Bitcoin Cash have been replaced by Cardano, Polkadot, Solana, Doge, and USDC.
EOS and Tezos are out of the Top Thirty and BSV dropped out of the Top Forty.
August Winners and Losers
August Winners – Tezos (+79%) outperformed the field this month followed closely by XRP (+70%).
August Losers – Besides Tether, BSV (+20%) underperformed compared to the rest of the 2020 Top Ten field.
Tally of Monthly Winners and Losers
After twenty months, here’s a snapshot of the 2020 Top Ten Experiment’s monthly winners and losers:
With five monthly victories, ETH leads the pack. Tether has the most monthly losses, always a good sign for the 2020 Top Ten Portfolio.
Overall Update – BNB in the lead, 100% of cryptos in positive territory, 2020 Top Ten best performing of the four Experiments
The 2020 Top Ten Portfolio continues to be the best performing of the four Top Ten Crypto Index Fund Experiments. 100% of the 2020 cryptos are in positive territory, most have at least triple digit price growth, and two cryptos in four digit growth territory (BNB and ETH). Binance Coin continues to hold a commanding lead.
The initial $100 investment twenty months ago into first place Binance Coin? Currently worth $3,540, an increase of +3,439%.
In second is Ethereum, also with quadruple digit gains, up +2,825%.
Besides USDT, the worst performer in the 2020 group is BSV, up +74% since January 2020.
Total Market Cap for the Entire Cryptocurrency Sector:
The total market finished August at $2.2T, picking up about $623B during the month. As a sector, crypto is up +1071% over the twenty month lifespan of the 2020 Top Ten Experiment.
If you were able to capture the entire crypto market since January 2020 (+1071%), you’d be doing quite a bit better than the Experiment’s Top Ten approach (+847%) and ridiculously better than the S&P (+40%) over the same time period. Much more on the S&P below.
The Top Ten index fund strategy has done pretty well up to this point in the experiment: it has outperformed eight of the ten individual cryptos held within the index. Only by guessing correctly on ETH or BNB would you have beaten the Top Ten approach.
Crypto Market Cap Low Point in the 2020 Top Ten Crypto Index Experiment: $185B in May 2020.
Crypto Market Cap High Point in the 2020 Top Ten Crypto Index Experiment: $2.2T now and in May 2021.
BitDom dropped to 42% in August. It was at 46.6% just last month. 42% is about as low as we’ve seen so far in the 2020 Top Ten Experiment: out of twenty months, Bitcoin Domination was only lower three months ago.
For context, here are the high and low points of BTC domination over the life of the 2020 Experiment:
Low Point in the 2020 Top Ten Crypto Index Experiment: 41.9% in May 2021.
High Point in the 2020 Top Ten Crypto Index Experiment: 70.4% in December 2020.
Overall return on $1,000 investment since January 1st, 2020:
The 2020 Top Ten Portfolio picked up $2,947 in August and is now worth $9,471 (+847%) from the initial $1k investment. For some context, the 2020 hasn’t yet reclaimed an All Time High: this portfolio was worth $10,5236 just four months ago).
The 2020 Portfolio remains the best performing of the four Experiments.
Below is a month by month ROI of the 2020 Top Ten Experiment, to give you a sense of perspective and provide an overview as we go along:
The portfolio has yet to experience a red month, although a little over a year ago in March 2020 it came close, returning a COVID induced low of +7%.
Combining the 2018, 2019, 2020, and 2021 Top Ten Crypto Portfolios
So, where do we stand if we combine four years of the Top Ten Crypto Index Fund Experiments?
2018 Top Ten Experiment: up 71% (total value $1,708) 2019 Top Ten Experiment: up +585% (total value $6,846) 2020 Top Ten Experiment: up +847% (total value $9,471) 2021 Top Ten Experiment: up +422% (total value $5,224)
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 $23,249 ($1,708 + $6,846 + $9,471 + $5,224).
That’s up +481% on the combined portfolios.
Lost in the numbers? Here’s a table to help visualize the progress of the combined portfolios:
That’s a +481% gain by investing $1k on whichever cryptos happened to be in the Top Ten on January 1st for four 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 with traditional markets. The S&P reached yet another all time high in August, something we’ve seen again and again this year. It has now returned +40% since January 1st, 2020.
That same $1k I put into crypto in January 2020 would be worth $1400 had it been redirected to the S&P 500 instead.
Crypto over the same time period? The 2020 Top Ten Crypto Portfolio is returning +847%. The initial $1k investment in crypto is now worth $9,471.
That’s a difference of $8,017.
On a $1k investment!
But that’s just 2020. 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 since January 1st, 2018? 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 = $1,690 today $1000 investment in S&P 500 on January 1st, 2019 = $1,810 today $1000 investment in S&P 500 on January 1st, 2020 = $1,400 today $1000 investment in S&P 500 on January 1st, 2021 = $1,200 today
So, 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 $6,100 ($1,690 + $1,810 + $1,400 + $1,200).
That is up +50% since January 2018 compared to a +481% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of 431% 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.
After three down months, the 2020 Top Ten portfolio bounced back with a vengeance in August. Not quite back to all time high territory, but if September is anything like this month was, that should change by my next report.
For those who have supported the Experiments over the years, thank you. For those just getting into crypto, I hope these monthly reports can somehow help with perspective as you embark on your crypto adventures. Buckle up, 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 most recently, January 1st, 2021.