$1k invested into the Top Ten Cryptos in January 2021 - UP +194% (FEB Update - Month Two)

Month #2 of the 2021 Top Ten Crypto Index Fund Experiment – UP +194%

See the full blog post with all the tables here.

This is the monthly report for the 4th of 4 concurrent homemade Top Ten Crypto Index Funds, the Class of 2021, made up of the following cryptos: BTC, ETH, Tether, XRP, LTC, DOT, BCH, ADA, BNB, and LINK.

In defiance of the 20% bonus for doing nothing with Moons, let's give some away: There's a hidden musical reference below, what is it? 95 big Moons to the first person to name the song and the artist! That's worth about $5 (95\.053) right now!* Just enough for a r/CryptoCurrency special membership (hint, hint)! To give more people a chance you can't win if you've already won this month (I'm looking at you u/MMasterMMind, u/betweentheuprights, and u/souloverego)

tl;dr:

  • What's this all about? On a dark and stormy night in January 2018, I made a homemade Index Fund, purchasing $100 of each of the Top 10. Despite the horrible bear market that ensued, I haven't sold or traded and have been reporting monthly ever since. I repeated the Experiment 2019, 2020, and 2021. Learn more about the history and rules of the Experiments here.
  • Feb WinnerBNB by a landslide (up nearly +400% in Feb).
  • Overall since Jan. 2021ADA still well ahead, Litecoin having the slowest start to the year, and BCH has dropped out of the Top Ten.
  • 2018+2019+2020+2021 Combined Top Ten Portfolios are returning 247% compared to +32% return of S&P
  • Special reader-suggested analysis below comparing the Top Ten approach to hypothetical Top Five and Top Three strategies

And away we go…

Month Two – UP 194%

2021 Top Ten +194% in two months

A blockbuster second month for the Top Ten Class of 2021: as of the end of February, the portfolio is up +194%, all cryptos are well in the green, and only one crypto (BCH) has dropped out of the Top Ten. The top performers this month were BNB, ADA, and Polkadot, all up triple digits in February.

February Ranking, Movement Report, and Dropouts

A ton of movement this month for the 2021 Top Ten Portfolio with 7 out of 10 cryptos changing positions.

Ups:

  • BNB – up five places (#9→#4)
  • ADA – up three places (#6→#3)
  • DOT – up one place (#5→#4)

Downs:

  • Bitcoin Cash – down one place (#10→#11, and out of the Top Ten)
  • Tether – down two places (#3→#5)
  • XRP – down three places (#4→#7)
  • LINK – down two places (#7→#9)

2021 Top Ten Rank, a fair bit of movement already

Top Ten dropouts since January 2021: This month Bitcoin Cash became the first 2021 Top Ten Crypto to drop out, replaced by Stellar.

February Winners and Losers

February WinnersBNB had a ridiculous month, finishing February up nearly +400%. ADA also performed extremely well, up +220%.

February Losers – As each of the 2021 Top Ten saw gains this month, Tether picks up a loss for February. Besides USDT, BSV had the weakest performance of the month, up only +2%.

Tally of Monthly Winners and Losers

So far, it’s the best possible outcome for the 2021 Top Ten: two straight losses for USDT. In the win column, Cardano and BNB have one each.

Overall Update – All cryptos in green, ADA well in the lead, Litecoin lagging, BCH drops out of Top Ten.

For the second month in a row, ADA continues to lead the pack, up a whopping +622% since the beginning of the year. The $100 bucks I invested into Cardano just two months ago is now worth $722. And thanks to an incredible February, BNB has pulled into second place, up +548%.

Besides Tether, Litecoin is the worst performing cryptocurrency of the 2021 Top Ten Portfolio so far at +35%. And BCH has the distinction of being the first crypto of the 2021 Portfolio to drop out of the top ten.

Total Market Cap for the Entire Cryptocurrency Sector:

2021 Top Ten approach beating the overall market over 100% at this point in the Experiment

After finally cracking the $1 trillion mark last month, the total crypto market cap added nearly half a trillion additional in February. The total market cap is up +93% already this year, just two months into the 2021 Top Ten Experiment.

Bitcoin Dominance:

BitDom down from January and holding steady

From a January 1st high of 70.4% BitDom continued to decline, ending February at 61%. Looking at the data from the other Top Ten Crypto Index Fund Experiments this is no surprise – it’s rare that Bitcoin dominance stays as high as the 70s.

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.

Overall return on $1,000 investment since January 1st, 2021:

$1k to $2,936 after two months

After just two months, the 2021 Top Ten Portfolio is up +194%. The initial $1000 investment on New Year’s Day 2021 is now worth $2,936.

Here’s the month by month ROI of the 2021 Top Ten Experiment, hopefully to give us a sense of perspective and provide an overview as we go along:

2021 Monthly ROI, strong start to the year

Combining the 2018, 2019, 2020, and 2021 Top Ten Crypto Portfolios

As most readers are aware, this is the fourth year of an Experiment I started back in January 2018, at the height of the last bull run. Where do we stand if we combine four years of the Top Ten Crypto Index Fund Experiments?

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 $13,893 ($1,150 + $4,543 + $5,264 + $2,936).

That’s up +247% on the combined portfolios, a record high for the Top Ten Index Fund Experiment project, and up from +127% last month.

Here’s a table to help visualize the progress of the combined portfolios:

Combining the ROIs of all four Top Ten Experiments is yielding +247%

That’s a +247% gain by buying $1k of the cryptos that happened to be in the Top Ten on January 1st, 2018, 2019, 2020, and 2021.

Top Ten Index Approach vs. Top Five vs. Top Three

Erwan, one of our blog readers, was curious on how the 2021 Top Ten Index would compare to a Top Five or a Top Three approach.

I crunched the numbers, and to make it more interesting, I removed Tether from both Indexes. Let’s take a look:

A Top Five Index (minus Tether, plus Polkadot) would mean investing $200 into BTC, ETH, XRP, LTC, and DOT.

What if 2021 Top Five?

After two months, a Top Five Index would be worth $2,201, a return of +120%.

A Top Three Index (minus Tether, plus XRP) would mean $333 into BTC, ETH, and XRP.

What if 2021 Top Three?

After two months, a Top Three Index would be worth $1,888, returning 89%.

So, at this early point in the 2021 Experiment at least, the $2,936 (+194%) return of the Top Ten Index is the best performing, even with the inclusion of a stablecoin.

Thanks for the suggestion, Erwan!

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. After a slow January, the S&P hit yet another all time high in February.

S&P up +4% in 2021

Compare that to the +194% gain of the 2021 Top Ten Crypto Portfolio over the same time period. Just two months in, the initial $1k investment in crypto is now worth $2,936

That same $1k I put into crypto in January 2021 would be worth $1040 had it been redirected to the S&P 500 instead.

That’s a difference of nearly $2k on a $1k investment in just two months.

So, yes, 2021 has been a good year so far for crypto!

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? 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 = $1460 today
  • $1000 investment in S&P 500 on January 1st, 2019 = $1560 today
  • $1000 investment in S&P 500 on January 1st, 2020 = $1210 today
  • $1000 investment in S&P 500 on January 1st, 2021 = $1040 today

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 $5,270.

That is up +32% since January 2018 compared to a +247% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of 215% 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.

https://preview.redd.it/olph5ldgd5p61.png?width=768&format=png&auto=webp&s=01f63dcc2aa3b5180c9692be22adebc847ecb354

Conclusion:

A fantastic start of the year for crypto. Having started this series of Experiments during the height of the last bull run, I’m more paranoid than elated when crypto skyrockets. How far this bull run can and whether or not we’ll see a true Alt Season remains to be seen. Be careful out there, crypto enthusiasts.

To both new and long time Experiment followers: thanks so much for reading and for supporting the Top Ten Crypto Index Funds, I hope you’ve found them 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 my parallel projects tracking the Top Ten cryptos as of January 1st, 2018 (the OG Experiment), January 1st, 2019, and January 1st, 2020.

For those just getting into crypto, I hope these reports can somehow help you see the highs and lows of what might await you on your crypto adventures. Buckle up, go with the flow, think long term, don’t invest what you can’t afford to lose, and most importantly, enjoy the ride!

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