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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. I then repeated the experiment on the 1st of January 2019. 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 2019 crypto space. 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.

The Rules:

Buy $100 of each the Top 10 cryptocurrencies on January 1st, 2019. Run the experiment two years. Hold only. No selling. No trading. Report monthly. Compare loosely to the 2018 Top Ten Experiment.

Month Eight - Up 42%

August was a bloody month for the 2019 Top Ten. All cryptos are in the red except Tether, which is of course flat. And when Tether is your top performer, you know it's been a bad month.

We have observed two straight downward months after a nice five month streak of either gains or sideways movement. That said, the 2019 Top Ten portfolio is still up +42% on the year, far better than the stock market as measured by the S&P (see below).

Ranking

Not much movement this month. It seems Stellar can't decide whether or not it wants to be in Top Ten, dropping out (again) to #11. Tron had a tough month, sliding down two spots to 14th. Tether moved up a spot but again, when Tether gains/advances in rank, it's a sign of a bad month.

Stellar joined Tron as a Top Ten dropout. They have been replaced by Binance Coin and Monero.

August Winners - Tether, by far. This is Tether's first monthly win. Bitcoin finished second, down -10%.

August Losers - Though technically a tie, I have to give the loss to Tron over Litecoin. Both are down -29% on the month, but Tron also lost two places in the rankings. Tron has now held the title of worst performer for two months in a row.

For those keeping score, here is tally of which coins have the most monthly wins and loses during the first eight months of this experiment: Bitcoin has two monthly victories. Tron has now tied Bitcoin SV for the most monthly loses: three out of the first eight months each.

Overall update – Bitcoin rockets past Litecoin, most cryptos in positive territory.

For those just joining the Experiment, despite the attention/press Bitcoin receives Litecoin was quietly the best performer of the year - up until this month. Litecoin gave up its lead and then some in August: BTC is now up +181% while Litecoin is 'only' up +123%. My initial $100 investment in Bitcoin is now worth $286.

Most cryptos are either flat or in positive territory. The exceptions are Ripple, Stellar, and Tron - Stellar is squarely at the bottom, down -45% so far in 2019, followed by Ripple, down -27%.

Total Market Cap for the entire cryptocurrency sector:

For the second straight month, the total crypto market cap decreased, losing about $40B in August. The overall market cap dipped below the $300B mark and is back to a level we saw around early June 2019. Still, there has been an increase of +111% since the beginning of 2019.

Bitcoin dominance:

Just when you think it can't get any higher, Bitcoin dominance jumps again in August, and now is over 70%. This sets another record for Bitcoin dominance so far in the 2019 and 2018 Top Ten Experiments.

Overall return on investment from January 1st, 2019:

I'm down about -$300 in August (after losing $400 in July). If I cashed out today, my $1,000 initial investment would return $1,422, a +42% gain.

In contrast, I'm down significantly in my 2018 Top Ten Index Fund Experiment. If I cashed that group out today, the $1000 initial investment would return about $203, down nearly -80%.

So, taken together, here's the bottom bottom line: after a $2000 investment in both the 2018 and the 2019 Top Ten Cryptocurrencies, my portfolios would be worth $1,625. That's down about -19%.

Implications/Observations:

Although the crypto space has seen two consecutive down months, the market as a whole is still up +111% on the year. In comparison, how have the 2019 Top Ten cryptos done? Up +42%. That's less than half the return of the overall market.

As a reminder, in May, the gains from the Top Ten and the entire market were both exactly the same amount: +114%. The last few months have seen that gap widen: for three straight months, focusing only on the Top Ten has been a losing strategy. This is reminiscent of last year as at no point in the Top Ten 2018 Experiment did the Top Ten strategy outperform 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. The S&P 500 is up +17% since the beginning of 2019. Very solid gains, but of course nothing like what we've seen in crypto so far this year. The initial $1k investment I put into crypto would have yielded +$160 had it been redirected to the S&P compared to the +$422 I'm currently up with the 2019 Top Ten Cryptos.

Conclusion:

After an unmistakably positive first half of the year, the second half has started with two back to back down trending months. Bitcoin continues to set Experiment records for dominance. Are altcoins dead? If not, how high can BTC dominance before altcoins make a move?

If you're just finding this experiment now, here's the backstory: On the 1st of January, 2018, I bought $100 each of the Top Ten cryptos at the time for a total investment of $1000 to see how they would perform over the year. I tracked the experiment and reported each month. The result? I ended 2018 down -85%, my $1000 worth only $150.

After last year's experiment ended, I decided to do two things:

1. Extend the Top Ten 2018 Crypto project one more year. The experiment is now in its 20th month. You can check out the latest update here.
2. What you're reading now is the 8th report of a parallel project: this year I repeated the experiment, purchasing another $1000 ($100 each) of the new Top Ten cryptos as of January 1st, 2019.

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.

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To learn more about the non-crypto me, check out @eoj:

Allow Me to Introduce Myself! | Husband / Father / Humanitarian / Traveler / Expat Abroad

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