EXPERIMENT - Top 10 Crypto "Index Fund" 2018 - (Month/Episode Five - The Bears Strike Back - down 51%)

in crypto-news •  5 months ago

2018 Top 10 Crypto Index Fund Experiment MAY RECAP.png

Catch up with previous experiment updates:
April Recap
March/Q1 Recap
February Recap
January Recap
Experiment Launch Video

The Experiment:

Instead of hypothetically tracking cryptos throughout the year, I made an actual $1000 investment, $100 in each of the Top 10 cryptocurrencies by market cap as of the 1st of January 2018. I'm trying to keep it simple and accessible for beginners, a type of homemade Index Fund* for those looking to get into cryptos but maybe not quite ready to jump in yet.
(*without weighting and rebalancing it's not a true Index Fund - but hopefully still helpful as a sort of a proxy for the entire market).

The Rules:

Buy $100 of each the Top 10 cryptocurrencies on January 1st, 2018. Run the experiment 365 days. Hold only. No selling. No trading. Report monthly.

Month/Episode Five (May) update: The Bears Strike Back

Spreadsheet - May recap 2.PNG

After a hopeful April, May saw the cryptocurrency market take a turn for the worse. IOTA holds the honor of being the only Top Ten crypto to finish the month ahead, up a whopping .01 cent at the time writing. All cryptos included in the experiment are back to negative territory for the year.

May Winners - IOTA alone held its value this month, moved up two positions (from 11th to 9th), and climbed back into the Top Ten - it wins May easily. Ethereum finished second, down only about -10%. Not bad for a fairly bloody month.

May Losers - NEM and Dash were the clear losers this month, both losing -34% of their value and both slipping down the rankings (NEM one slot from 14 to 15 and Dash two slots from 12 to 14) followed closely by Cardano down -32% in May.

Overall update – Stellar continues to lead while NEM, Ripple, and Dash lag


Looking at the big picture, in many ways not much has changed since last month. Although Stellar is down -6% for the year, it is still the best performing of the original Top Ten by far. A distant second is Ethereum, down -19% so far in 2018.

After Ethereum there's a big ugly gap where it seems some of the players just fall off a cliff. There's a virtual three way tie between the absolute worst performers with NEM, Ripple, and DASH each down around -70% on the year.

Total Market Cap for the entire cryptocurrency sector:

May Recap - Total Market Cap.PNG

May saw a -20% drop in crypto and the total market cap shed approximately $80B. From January 1st, the market has lost -42% or about $240B in value.

Bitcoin dominance:

May Recap - Bitcoin Dominance.PNG

As the pattern so far this year would predict, when the overall market declines Bitcoin dominance increases as people presumably move from their alt coin positions into the more stable and well established projects. It was no different this month: Bitcoin dominance increased slightly from 37% to 38.6% in May.

Overall return on investment from January 1st, 2018:


My $1000 initial investment is now worth about $487, down just over -51%.

Implications:


May was another rough month in cryptolandia, but for a little perspective just remember March was far, far worse. Stellar continues to be the project to beat in 2018 - even when it loses, it consistantly seems to lose the least. For those keeping score, IOTA's strong showing in May broke Stellar's two month streak of best performing Top Ten crypto.

Again, focusing solely on holding the Top Ten continues to be a losing strategy. While the overall market is down -42% from January, the Top Ten are down -51% over the same period of time. This approximately 9% differential is about the same as the last two months in a row. At no point in the experiment has this kind of investment in the Top Ten outperformed the overall market.

I'm also tracking the S&P 500 as part of my experiment to have a comparison point with other popular investments options. May has continued to see volatility, but as of this post it's in the green, up about 1.2% for the year.

May Recap - S and P 500.PNG

Conclusion:


After some nice upward movement in April, the market gave up some of its gains in May. With the political turmoil in Spain and Italy at the start of June, it should be an interesting month. If regular markets react negatively to current events, will money shift into the crypto space? We'll see.

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.

What do you think about the way the market is going this year and when (if ever) do you think we'll see a proper bull rally? Is June the month? What effect, if any, will current events in Europe have on the cryptocurrency market in June?

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I have been following this experiment of yours. It will be interesting to see where everything ends up at the end of the 12 months.

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Definitely interesting, I hope in a positive way! :)

Thanks so much for the support and for the promotion!!

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Fingers crossed for a good end result.

Your welcome !

You got a 90.00% upvote from @blogbooster courtesy of @starthere!
Multiple upvotes will follow shortly by our curation trail!

Resteemed your post over 2,450+ followers! As Of My Free Resteem Service

This post has received a 0.63 % upvote from @drotto thanks to: @rentmoney.

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Thank you @hiruhanif! I will keep going, at least until the end of the year :) Hope all is well in Bangladesh. Is it raining much today?

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Not at all...Very hot around here!!

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Really? But coming soon, right? It started raining here in Thailand already!

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Yeah hope so.nice talking you

Greetings! @starthere 👦
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Thank you @sam-resteem, much appreciated!

This is an awesome experiment! Keep it up! You’ve earned a follow lol

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Thanks so much for the encouragement @la2410!!

I enjoyed reading about your experiment. I honestly hope you can get back your initial investment and earn more. Upvoted, followed and resteemed. Stay cool!

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I'm glad you enjoyed the post @thefauceteer and thanks for the kind wishes. I'm confident (or at least hopeful) things will turn around before the experiment finishes at the end of the year!

Just wanted to let you know that @rentmoney featured you in their entry post for the Pay It Forward Curation Contest

I have mixed thoughts on the crypto market as a whole. Feel like there is a lot of shit coins out there that could drop like a rock as the shills pull their money out of them. This money will likely flow into real coins which could help boost them .

There is also such a large amount of institutional investor interest in the US that the entire market could change very quickly. These biggest ones just in the US have more money under management then the entire crypto market cap so that could be a game changer as more tools are being built so they can move into the markets. Also further regulation will likely make them more comfortable moving funds into the market and that is coming no matter what in the US.

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Thanks for letting me know @thedarkhorse and thanks to you and @rentmoney for your commitment to giving back and encouraging the little guys, very much appreciated. @rentmoney is constantly running contests or offering help, he'll have tons of followers soon. And I love what you're doing with the Pay It Forward contests, good stuff.

I tend to agree with your sentiments. I think in a few years there will be a few big winners in crypto, but you're right, 90% of projects will go bust and are only being kept alive by hype cycles and FOMO.

In terms of big money getting into crypto, ETFs are coming which should attract a lot of investment and excitement. I'm with you, I don't fear regulation like many crypto enthusiasts. It's still too wildwest for mom and grandpa to get into it. Once people feel safe, we'll see growth. That and comfortable. With a few exceptions, the crypto space is still much too confusing to navigate, especially if you want to get into altcoins. Once we get to one-click purchase, trade, or transfer, watch out, crypto could explode.

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Just saw an add by Yahoo Finance which was promoting cryto. "Cryptocurrency is her to stay" was the tagline. Really cool to see this. If you get more stuff like that the average person is going to realize they need to put part of their retirement money into crypto to be diversified and that will drive up the prices. The US is WAY behind in terms of investing in crypto and is one of the richest countries out there so once this country starts investing there really is no stopping the prices from jumping IMO.

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Thanks @thedarkhorse. I wonder what the stats are in terms of country investments in crypto? Most Americans go through Coinbase which made a TON of money last year. I know Japan, Korea, Europe, Australia, and others are well into crypto too, but I'm not sure which population has the absolute most. It would be interesting to see a chart! But your point is taken, once the masses (in any country) start jumping in, things could get interesting!

@rentmoney featured you in the Pay it Forward curation contest . That's what brought me to your post .

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Awesome, @rentmoney has been very supportive of the experiment! Thank's for stopping by @wolfhart I hope you found it interesting and my results so far aren't too depressing :)

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@starthere I found it very interesting . I like to see how it pans out . This was my second report I seen . I'll be watching and see the recovery 🙏

I'm so sorry to be so late coming here, but I'll be curious where this all goes over the next few months.

I found your post because @rent-money featured you in our Pay it Forward Curation Contest for which I am a judge. You should think about joining us too :)

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No worries @lynncoyle1, thanks for stopping by! I too will be curious how this goes, ha! Even though I'm down so much, it's still been fun to track.

I don't know if I can pull off an entry this round, but I definitely want to participate in the future. I'm following @thedarkhorse (and now you) so will be watching for the next announcement :)

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My fingers are crossed for you! Let's face it; if we're on steemit, we're rooting for cryptocurrencies in general :)

No worries! It's an ongoing weekly contest, so jump on in anytime!