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Wednesday, April 8, 2020

EXPERIMENT - Tracking 2020 Top Ten Cryptocurrencies – Month Three - UP +7%


Month Three – UP 7%

Crypto in the time of COVID. Red across the board. Out of the three portfolios, the 2020 Top Ten is the best performing for the second month in a row.

Ranking and March Winners and Losers

Besides Bitcoin Cash and Tether switching places, the 2020 Top Ten were locked in place. Surprising for a month with so much going on. 

March Winners – Ah, Tether, never a good sign.  BTC and XRP finish in second place both down -23% in March.
March Losers – Ethereum, down -38%, followed closely by Tezos, down -37%.
For those keeping score, I also keep a tally of which coins have the most monthly wins and losses. After three months, still very spread out. Tether and BSV have one loss and one win each.

Overall update – BSV maintains strong lead, followed by Tezos. 50% in positive territory, EOS worst performing.

No change since last month. BSV is clearly in the lead, up +69% so far in 2020. Then comes Tezos following in second place, up nearly +25% since January 1st, 2020. EOS is the worst performing of this group, down -10% on the year.

Total Market Cap for the entire cryptocurrency sector:

The overall crypto market lost about $60B in March 2020 and is now down -2% since the 2020 Top Ten Experiment began in January 2020.

Bitcoin dominance:

Bitcoin dominance (or BitDom as I like to call it) gained about +1.5% in March, something we’ve seen time and time again over the course of all three experiments when the overall market suffers.

Overall return on investment since January 1st, 2020:

The 2020 Top Ten Portfolio lost a massive $442 this month. After an initial $1000 investment, the 2020 Top Ten Portfolio is worth $1,069, up about +7%. Pretty good all things considered, but a far cry from last month’s numbers.  
Here’s the month by month ROI of the 2020 Top Ten Experiment, hopefully helpful to maintain perspective and provide an overview as we go along:
Ouch. +51% to +7%, quite a drop.
So, how does the 2020 Top Ten Experiment compare to the parallel projects?
Taken together, here’s the bottom bottom bottom line: 
After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, my portfolios are worth $2,267‬.
That’s down about -24% (compared to about +5.6% last month).
So that’s the Top Ten Crypto snapshot. let’s take a look at how traditional markets are doing.

Comparison to S&P 500

I’m also tracking the S&P 500 as part of my experiment to have a comparison point with other popular investments options. Stocks have been getting hammered in March, now down -23% on the year. For reference, it was down -9% a month ago.
Over the same time period, the 2020 Top Ten Crypto Portfolio is returning about +7%, now worth about $1,070.
The initial $1k investment I put into crypto would now be worth $770 had it been redirected to the S&P 500. That’s a $300 swing.
And same approach with the S&P 500 as I took with the first three years of the Top Ten Crypto Experiments? Here are the figures:
  • $1000 investment in S&P 500 on January 1st, 2018: -$80
  • $1000 investment in S&P 500 on January 1st, 2019: -$10
  • $1000 investment in S&P 500 on January 1st, 2020: -$230
Taken together, here’s the bottom bottom bottom line for a similar approach with the S&P: 
After three $1,000 investments into an S&P 500 index fund in January 2018, 2019, and 2020, my portfolio would be worth $2,680.
That’s down about -11% compared to -24% with the Top Ten Crypto Experiment Portfolios.
That’s a 13% difference. Last month the gap was only 1%.

Implications/Observations:

The crypto market as a whole is down about -2% since the beginning of the year and the 2020 Top Ten cryptos have gained +7%. Focusing on the Top Ten 2020 coins has now beaten the overall market three months in a row.
This is hasn’t happened very often since I started these experiments in January 2018. Although there are a few examples of the Top Ten strategy outperforming the overall market in the 2019 Top Ten Experiment, it’s interesting to note at no point in the first twenty-seven months of the Top Ten 2018 Experiment has the approach of focusing on the Top Ten cryptos outperformed the overall market. Not even once.

Conclusion:

2020 has been surreal so far, with literally every life on the planet touched in someway by COVID-19. We’re still a long way from emerging from this and I don’t think anyone knows how our lives will be changed going forward. For crypto, this will be a good opportunity to see if it is a gold-like safe haven in troubled times, as many have suggested. We’ll see.
Final word: take care of yourselves, your families, and your communities. Keep up the social distancing, bend the curve, wash your hands. Be careful out there.
Thanks for reading and for supporting the experiment. I hope you’ve found it helpful. I continue to be committed to seeing this process through and reporting along the way. Feel free to reach out with any questions and stay tuned for progress reports. Keep an eye out for the original 2018 Top Ten Crypto Index Fund Experiment and the 2019 Top Ten Experiment follow up experiment.
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