$1k invested into the Top Ten Cryptos in January 2021 - UP +393% (April Update - Month 4)

Not sure why, but it looks like I've lost the ability to insert images on my posts, so apologies for the wall of text with no tables.

You can see the full blog post with all the tables here.

This is the monthly recap for the 4th of 4 homemade Top Ten Crypto Index Funds. The 2021 Portfolio is made up of: Bitcoin, Ethereum, Tether, XRP, Litecoin, Polkadot, Bitcoin Cash, Cardano, Binance Coin, and Chainlink.

MOONS!: There's a hidden musical link below, what is? 59 Moons to the first person to name the song and the artist AND to say something nice about another commenter! Why 59? That's worth about $5 (59\.085),* my way of encouraging the winner to go for a r/CryptoCurrency special membership. To give more people a chance you can't win if you've already won this month. And you're gonna need a Vault.

tl;dr:

• What's this all about? Back in January 2018, I made a homemade crypto Index Fund, purchasing $100 of each of the Top 10. Crypto winter started immediately after, but 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 (including why in the world I would include Tether) here.
• April Winner - XRP, hands down. It more than doubled the gains of second place BNB.
• Overall since Jan. 2021 - BNB by a ton. Bitcoin lowest out of the gate.
• 2018+2019+2020+2021 Combined Top Ten Portfolios are returning 513%.
• Special reader-suggested analysis below comparing the Top Ten approach to hypothetical Top Three approach.

Here we go:

Month Five – UP 393%

Led by XRP, it was another strong month for the Top Ten Class of 2021. With the exceptions of BTC and DOT, every crypto finished in the green and the portfolio as a whole performed better than it did in March.

April Movement Report, Ranking, and Dropouts

A lot of movement this month: two ups and five downs for the 2021 Top Ten in April:

Ups:

• Bitcoin Cash – up four places (#14→#10) and back in the Top Ten
• XRP – up three places (#7→#4)

Downs:

• Tether – down one place (#4→#5)
• Litecoin – down two places (#9→11)
• DOT – down two places (#6→#8)
• ADA – down two places (#5→#7)
• LINK – down two places (#10→#12) and out of the Top Ten

Top Ten dropout since January 2021: So far, two cryptos have dropped out of the 2021 Top Ten: Chainlink and Litecoin. They have been replaced by UNI and DOGE (not an April Fool’s joke).

April Winners and Losers

April Winners – The same two names as last month: XRP easily outpaced its 2021 Top Ten peers, up +172% in April. That’s over double the gains of second place BNB, which added +78% this month.

April Losers – Only two cryptos finished in the red this month. By the slimmest of margins, Bitcoin (-5.0%) lost the most ground in April, finishing just behind the second worst performing crypto DOT (-4.9%).

Overall Update – BNB increases lead, all cryptos well in green, Bitcoin at the bottom

BNB extended its lead over second place ADA even more this month and is now the first of the 2021 cryptos to have four digit gains (+1488%).

The $100 bucks I invested into BNB just four months ago is now worth $1593.

Besides Tether, Bitcoin is the worst performing cryptocurrency of the 2021 Top Ten Portfolio. Although the “worst performing” are still pulling in an ROI of +92% in four months.

Total Market Cap for the Entire Cryptocurrency Sector:

$1 trillion was sooooo three months ago: crypto as a market finished April solidly above the $2 trillion dollar mark. The total market cap is up +185% since the beginning of the year.

Bitcoin Dominance:

BitDom on the other hand continues to head in the opposite direction: it ended April at 48%, sliding 10% in one month.

To see what happened last time Bitcoin dominance was this low, you’d have to go back to the early months of the 2018 Top Ten Experiment. Spoiler alert: this was when the crypto market was imploding, kicking off the years long bear market we’ve only recently emerged from.

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

After four months, the 2021 Top Ten Portfolio is up +393%. The initial $1000 investment on New Year’s Day 2021 is now worth $4,927.

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

An extremely strong first few months for the 2021 Top Ten Portfolio – and the best start, by far, of any of the four Top Ten Crypto Experiments.

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 of 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?

• 2018 Top Ten Experiment: up +56% (total value $1,556)
• 2019 Top Ten Experiment: up +653% (total value $7,527)
• 2020 Top Ten Experiment: up +952% (total value $10,522)
• 2021 Top Ten Experiment: up +393% (total value $4,927)

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 $24,532 ($1,556 + $7,527 + $10,522 + $4,927).

That’s up +513% on the combined portfolios, another record high for the Top Ten Index Fund Experiment project, up from +333% last month.

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

That’s a +513% gain by throwing $1k into the cryptos that happened to be in the Top Ten on January 1st, 2018, 2019, 2020, and 2021.

Top Ten Index vs. Top Three Index

Inspired by a suggestion from one of our blog readers, let’s take a look at how the 2021 Top Ten approach would compare to just focusing on the Top Three.

I crunched the numbers, and to make it more interesting, I removed Tether from the index and pulled #4 into the Top Three.

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

After four months, a Top Three Index would be worth $4,222, returning +322%. That’s compared to the $4,927 (393%) of the 2021 Top Ten.

So, at this early point in the 2021 Experiment, it would have been better to go with a Top Ten Index approach instead of focusing on the Top Three.

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. Another month, another all time high for the S&P 500.

The S&P 500 Index is up 11% in 2021. The initial $1k investment I put into crypto three months ago would be worth $1,110 had it been redirected to the S&P 500.

The 2021 Top Ten Crypto Portfolio is up +393% over the same time period. Three months in, the initial $1k investment in crypto is now worth $4,927.

That’s a difference of $3,817 on a $1k investment in just four months.

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 = $1564 today
• $1000 investment in S&P 500 on January 1st, 2019 = $1670 today
• $1000 investment in S&P 500 on January 1st, 2020 = $1290 today
• $1000 investment in S&P 500 on January 1st, 2021 = $1110 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 $5,634 ($1,564 + $1,670 + $1,290 + $1,110)

That is up +41% since January 2018 compared to a +513% gain of the combined Top Ten Crypto Experiment Portfolios, a difference of 472% 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.

Conclusion:

The 2021 Top Ten Portfolio is off to a fantastic start, up +393% in four months. How long it can keep up this pace remains to be seen especially since April also saw a significant decline in Bitcoin Dominance. If the last cycle is any indication, we may be approaching a significant dip in the coming months.

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 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! 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.