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. It began as a lazy man's Index Fund (no weighting or rebalancing), but I'm starting to move away from that terminology as things have changed quite a bit since January 1st, 2018 (plus the term "Index Fund" seems to bring out the shills trying to sell their own Crypto Index Fund product).

My experiment is less technical, more fun (for me at least), and hopefully still a proxy for the entire market- or at the very least an interesting snapshot of the 2018 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.

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 Nine - Down 71%

September ended up being pretty flat, unusually so for crypto. My Top Ten portfolio lost about $15 bucks, which is really not that bad, but breaking under the psychological $300 barrier hurts. That's right - my initial $1,000 investment is worth $286 today. That said, it was nice to see a bit of green on the board: I haven't seen any currencies end a month in positive territory since the end of July.

September Winners - Ripple absolutely dominated September, finishing the month +65% higher than it started. Stellar had another very respectable month, adding +16%.

September Losers - Cardano and IOTA both ended the month losing nearly a quarter of their value, down -27% and -23% respectively. Ethereum didn't fare much better, down -21% in September.

Overall update – Stellar easily in the lead, BTC a distant second. Cardano joins NEM at the bottom

My reports are starting to sound like a broken record: although down -20% for the year, Stellar remains squarely in the lead, followed distantly by Bitcoin down -50% for the year. This is not a surprise to anyone who's been following the experiment - Stellar has been one of the strongest cryptos most if not all months this year.

NEM continues to hold its familiar position at the bottom, but now has company - Cardano's rough September has put it in a virtual tie with NEM. Both are almost -90% under their January 1st price - my initial $100 investment in NEM and Cardano at the beginning of the year is now worth about $11 bucks. IOTA and Dash follow, down -84% and -82% on the year, respectively.

In terms of ranking, only NEM made a move, continuing its slide from #16 to #17 according to CoinMarketCap. NEM, Dash, and IOTA are Top Ten dropouts - they have been replaced by EOS (now at #5), Tether (currently at #8), and Monero (currently at #10).

Total Market Cap for the entire cryptocurrency sector:

September saw the downward trend in crypto continue. The total market cap for crypto is now at its lowest month-end point of the year, as it was last month. From January 1st the market has lost -62%. Crypto hasn't ended a month above $300B since the end of May.

Bitcoin dominance:

Fairly flat here as well. At 51.4%, we didn't quite see Bitcoin dominance reach its year month-end high of 53%, but it's very close. As we've seen this throughout the experiment, when the overall market dives, BTC's dominance increases.

Overall return on investment from January 1st, 2018:

If I cashed out today, my $1000 initial investment would return $286, down -71%. Although I'm officially at the lowest point in terms of value, it at least feels like the bleeding has slowed - I've only ticked down about one percent this month.

Implications/Observations:

Although it was refreshing to see a bit of green (thanks to Ripple and Stellar) this is about as flat a month I can remember since I started the experiment at the beginning of the year. Almost no movement in coin ranking, not much change in total portfolio value. Yes, the overall market cap is at yearly lows and Bitcoin is well under $7k, but I'm sensing some anticipation in the air - I feel we'll have a break out in one direction or another soon.

It would have to take some big moves in the next few months to convince me that any crypto has performed better than Stellar in 2018. XLM is far and away the most consistently positive Top Ten player this year.

Focusing solely on holding the Top Ten continues to be a losing strategy. While the overall market is down -62% from January, the cryptos that began 2018 in the Top Ten are down -71% over the same period of time. At no point in the experiment has this investment strategy worked: the initial Top Ten continue to under-perform compared to the market overall.

That said, this month represents the first month of the year so far that the differential has shrunk. Last month there was a 12% difference, this month it's back to 9%. Interesting - I believed the gap would only continue to widen.

I'm also tracking the S&P 500 as part of my experiment to have a comparison point with other popular investments options. September was another good month for the index - it's now up very respectable 9.4% for the year. A $1k investment would have given me $94, much better than the alternative - losing $714 on my $1k investment in crypto!

Conclusion:

Yet another down month, but definitely had the feeling of "flatness" - maybe this is what a true bottom feels like? Having both Ripple and Stellar in the green this month made it much enjoyable putting this report together. Let's see if it keeps up in October.

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.

As the year winds down, I haven't decided yet what to do with the experiment after December. If any one has suggestions, let me know in the comments.

Enjoy this post? Follow @starthere to stay updated on the experiment

Catch up with previous experiment updates:

August Recap
July Recap
June/Half-time Report
May Recap
April Recap
March/Q1 Recap
February Recap
January Recap

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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EXPERIMENT - Tracking Top 10 Cryptocurrencies for One Year (2018) - Month Nine/Q3 - Down 71%