Stellar reclaims the lead in the experiment
tl;dr - Two good months in a row for the Top Ten, Cardano far outperformed the pack in March, Stellar overtakes Bitcoin for the overall lead.
Click here for full blog post complete with lots of pretty colors.
The Experiment:
Instead of hypothetically tracking cryptos, I made an actual $1000 investment, $100 in each of the Top 10 cryptocurrencies by market cap as of the 1st of January 2018. Think of it as a lazy man's Index Fund (no weighting or rebalancing), less technical, more fun (for me at least), and hopefully still a proxy for the market as a whole - or at the very least an interesting snapshot of the 2018/2019 crypto space. I’m trying to keep it simple and accessible for beginners and those looking to get into crypto but maybe not quite ready to jump in yet.
I have also started a parallel project: on January 1st, 2019, I repeated the experiment, purchasing another $1000 ($100 each) into the new Top Ten cryptos as of January 1st 2019.
The Rules:
Buy $100 of each the Top 10 cryptocurrencies on January 1st, 2018. Run the experiment two years. Hold only. No selling. No trading. Report monthly.
Month Fourteen - Down 83%
March marked two solid back to back months: besides Ripple (which is only down -2%) the entire field is green. And sixty percent of the field saw well over double digit gains in March.
Ranking
Not tons of movement this month. Both Dash and Cardano moved up two places in the rankings, great progress for these projects this month. Congrats to Cardano on reclaiming its Top Ten Spot, a position it hadn't occupied since November 2018.
IOTA dropped a place and NEM continued it's steady descent - it now holds the dubious distinction of being the first crypto in the experiment to have fallen out of the Top Twenty.
NEM, Dash, and IOTA are Top Ten dropouts - they have been replaced by EOS, Tether, and Binance Coin.
March Winners - Cardano absolutely crushed the field this month, up nearly +63% in March, followed by Dash, up +33%.
March Losers - Ripple was the only crypto in the red in March, down -2%.
For those keeping score, here is tally of which coins have the most monthly wins and loses during the first 15 months of this experiment. Most monthly wins (3): Litecoin. Most monthly loses (4): NEM.
Overall update – Stellar takes back the lead from Bitcoin. NEM and BCH at the bottom.
Stellar, down -66% from January 2018, reclaimed the overall lead in the experiment, overtaking Bitcoin, down -69% over the same period. Yes, being down "only" this much qualifies both as the best performers.
Although they bounced back a bit this month, NEM and Bitcoin Cashcontinue to occupy the bottom, down -94% and -93% respectively. My initial $100 investment in NEM is worth just $5.91 and Bitcoin Cash is worth $6.70.
Total Market Cap for the entire cryptocurrency sector:
The total crypto market cap increased $15B in March, up +11% for the month. It is down -75% since the beginning of the experiment, January 1st, 2018. At $145B, the market is at its highest point since November 2018.
Bitcoin dominance:
Bitcoin dominance dropped again in March, inching closer to the psychologically significant 50% mark. If experiment history is any indication, we can expect to see BTC dominance drop as/if the overall market gains strength and people feel more willing to risk investing in projects other than Bitcoin.
Overall return on investment from January 1st, 2018:
My Top Ten of 2018 portfolio increased nearly $25 in total value this month. Another tiny gain, but noteworthy, as ending two months in a row in positive territory unheard of thus far in the experiment. If I cashed out today, my $1000 initial investment would return about $165, down -83%. Another rare event: I have almost always ended the month setting a record low in terms of value over the life of the experiment. March marks back to back month where this has not the case.
Implications/Observations:
Back to back months seeing nearly all cryptos in positive territory is a welcome change for the experiment. Have we indeed bottomed out?
After a few months of back and forth, Stellar, 2018's champion, stabilized, has reclaimed the lead over Bitcoin.
The experiment's focus of solely holding the Top Ten continues to be a losing proposition. While the overall market is down -75% from January 2018, the cryptos that began 2018 in the Top Ten are down -83% over the same period of time. At no point in the experiment has this investment strategy worked: the initial 2018 Top Ten continue to under-perform compared to the market overall.
The 8% difference is slightly down from last month. The widest gap was a 12% difference at one point last year (September 2018).
I'm also tracking the S&P 500 as part of my experiment to have a comparison point with other popular investments options. After a pretty significant December dip, the stock market continues to rebound. It's up 6% since the beginning of 2018, so that $1k investment I threw into crypto would have yielded +$60.
Conclusion:
Both February and March have been solid months for crypto. These updates aren't about technical analysis, but I'm starting to see commentators highlight positive trends. That's encouraging, but I'd personally like to see a few more consecutive positive months before claiming a bottom.
Thanks for reading and the support for 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.
No comments:
Post a Comment