See the full blog post with all the tables here.
And learn about the history and the rules of the Experiments here.
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Month Ten – UP 61%
October was a bit mixed, but much better for the 2020 Top Ten cryptos than the nearly all red September. Bitcoin and Litecoin led the way this month with 70% of the Top Ten either flat or in positive territory.
Question of the month:
In October, this cryptocurrency exchange angered its users by suspending all withdrawals indefinitely.
Scroll down for the answer.
Ranking and October Winners and Losers
Half of the 2020 Top Ten were on the move in October: BNB, BSV, and Tezos all fell in the rank, while EOS and Litecoin climbed. Notably, LTC’s ability to pick up an impressive four places has landed it back in the Top Ten. It had dropped out in September for the first time since I began the Top Ten Experiments nearly three years ago.
Drop outs: after ten months of tracking, 30% of the cryptos that started 2020 in the Top Ten have dropped out. BSV, EOS, and Tezos have been replaced by ADA, LINK, and most recently, DOT. With its two place slide, Tezos becomes the first 2020 Top Ten Index Fund Experiment Crypto in danger of free falling out of the Top Twenty.
October Winners – BTC had a very strong month, finishing up +25% and increasing its dominance (more on that below). Not quite intergalactic yet, but it feels like it might be coming soon. Litecoin was a high performer as well, up +17% in October.
October Losers – Tezos followed an absolutely horrible September with another underperforming month, finishing down -14%. This is XTZ’s second loss in a row. BSV was second worst performer, down -7%.
Since there’s not enough division in this world already, let’s pit these cryptos against each other, shall we? Here’s a table showing which cryptos have the most monthly wins and losses ten months into the 2020 Top Ten Crypto Index Fund Experiment:
ETH is still in the lead three monthly Ws, followed by Tether and Tezos with two wins each. Even though it is up +66% since January 1st, 2020 making it the fourth highest return on investment in the 2020 Top Ten Portfolio, BSV also has the most monthly losses with four.
Overall update – ETH maintains a very healthy lead, followed by BNB, then BTC. BSV drops out of Top Ten.
Despite all the recent excitement around BTC, it’s actually Ethereum that remains firmly in the lead this year. ETH is up +210% in 2020, followed by BNB (+106%) then Bitcoin (+90%).
With a poor showing in October, EOS (-1%) is now the worst performing cryptocurrency of the 2020 Top Ten Portfolio and the only crypto in the red. The other nine cryptos in this group are in positive territory.
And BSV fell out of the Top Ten this month for the first time since April 2019.
Total Market Cap for the cryptocurrency sector:
If we step back and look at the entire crypto space, October was full of positive news:
- The overall crypto market gained nearly $50B this month
- The total crypto market cap is up +111% since the beginning of this year’s experiment in January 2020.
- It passed (barely) the psychologically significant $400B mark
- This is the highest month-end level since the 2020 Top Ten Experiment began 10 months ago
After briefly visiting the fifties, BitDom jumped back up to the sixties (where it has been for most of the year). As always, a high BitDom signals less of an appetite for altcoins and vice versa.
For context, the BitDom range since the beginning of the experiment in January 2020 has been roughly between 57% and 68%.
Overall return on investment since January 1st, 2020:
After an initial $1000 investment on January 1st, the 2020 Top Ten Portfolio is now worth $1,613, up +61%. The 2020 group has fallen behind the 2019 Top Ten Portfolio which is now the best performing of the three.
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:
Even during the zombie apocalypse blip in March, the 2020 Top Ten has managed to end every month so far in the green (for a mirror image, check out the all red table you’ll find in the 2018 Top Ten experiment). The range of monthly ROI for the 2020 Top Ten has been between a low of +7% in March and high of +83% in August.
So, how does the 2020 Top Ten Experiment compare to the parallel projects?
- 2018 Top Ten Experiment: down -74% (total value $264)
- 2019 Top Ten Experiment: up +66% (total value $1,660)
Taken together, here’s the bottom bottom bottom line for the three portfolios:
After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, my combined portfolios are worth $3,537 ($264+ $1,660 +$1,613).
That’s up about +18% for the three combined portfolios, compared to +11% last month.
Lost in the numbers? Here’s a table to help visualize the progress of the combined portfolios:
That’s a +18% gain by buying $1k of the cryptos that happened to be in the Top Ten on January 1st, 2018, 2019, and 2020.
But what if I’d gone all in on only one Top Ten crypto for the past three years? While many have come and gone over the life of the experiment, five cryptos have started in Top Ten for all three years: BTC, ETH, XRP, BCH, and LTC. Let’s take a look:
At this point in the Experiments, we have nearly a tie between BTC and ETH. Bitcoin made up a lot of ground in October, as Ethereum was well ahead until this month. On the other hand, following this approach with XRP, I would have been down nearly a third at -32%.
So that’s the Top Ten Crypto Index Fund Experiments 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 to traditional markets. The S&P continued to slip from an all time high in August and is now up just nearly at break even point, up only +1% in 2020.
Over the same time period, the 2020 Top Ten Crypto Portfolio is returning about +61%. The initial $1k investment in crypto is now worth about $1,613.
That same $1k I put into crypto in January 2020 would be worth $1010 had it been redirected to the S&P 500 instead.
That’s a $603 difference on a $1k investment, one of the largest gaps in favor of crypto all year.
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 three 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 = $1220 today
- $1000 investment in S&P 500 on January 1st, 2019 = $1300 today
- $1000 investment in S&P 500 on January 1st, 2020 = $1010 today
So, 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 $3,530.
That $3,530 is up +17.6% since January 2018, compared to a +17.9% gain of the combined Top Ten Crypto Experiment Portfolios over the same period of time. You can also compare against five individual coins (BTC, ETH, XRP, BCH, and LTC) by using the table above if you want.
It’s very small, but that is a 0.3% difference in favor of crypto. To help provide perspective, here’s a quick look at the combined three year ROI for crypto vs. the S&P up to this point in 2020.
For those keeping track or unable to see the table above: that’s seven monthly victories for the S&P vs. three monthly victories for crypto. The largest gap so far was a 22% difference in favor of the S&P back in June and you may notice that the crypto victories have all occurred in the second half of 2020.
As it often seems that crypto and traditional markets move in tandem, it was nice to see a bit of divergence this month. Just about sixty days left in an unrelenting year. I’m looking forward to seeing what crypto can do in the last few months of a very unpredictable year.
Stay healthy and take care of yourselves out there. And take care of each other too.
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.
And the Answer is…
Malta based cryptocurrency exchange OKEx suspended all withdrawals of cryptocurrencies in October. The move was tied to the reported investigation of OKEx founder Star Wu.
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