Steemit blogger @starthere (Joe) has been conducting an invaluable and insightful experiment, ‘Tracking [the] Top 10 Cryptocurrencies for One Year (2018)’. The results are eye-opening and all too real for hodlers.
In short, Joe invested $1,000 at the beginning of 2018 into the Top 10 cryptocurrencies by market cap. As he notes, there’s no weighting or rebalancing, just a simple 10 x 10% investment into the top 10 with no selling or trading. The coins include:
Despite a ‘dull’ month for September and October, November (as we’re all acutely aware) contained face-tearing negative price action. Joe’s fund is now down a staggering 84%, and is worth $161. The ‘winners’ of the month don’t cover themselves in glory, either. Performing the ‘least horribly’ include; NEM, Ripple, and Stellar, down -18%, -22%, and -29%, respectively. All of these coins moved up in terms of market cap ranking.
Accolade of ‘November loser’ was awarded to Bitcoin Cash for a second month, losing an awesome (and terrifying) -62% of its value.
Overall Fund Update
There is some relatively good news amidst all the doom-and-gloom. Stellar, despite being down -50% for the year, remains significantly ahead of the other coins in the fund. However, the good times end there. Bitcoin is a distant second, down almost -70%. Cardano and Bitcoin Cash are the worst performers, down -94% and -93%, followed closely by NEM, IOTA, and Dash. This means that 5 out of the top 10 cryptocurrencies have lost more than 90% of their total value.
Furthermore, market cap ranking and movement was significant. Stellar climbed from #6 to #4, NEM from #17 to #15, and Ripple, reclaimed the coveted #2 spot, dethroning Ethereum (again).
Ethereum dropped to #3 from #2, Bitcoin Cash down to #5 from #4, Cardano rests precariously at #10, falling two slots from #8 in October. IOTA slipped one place to #13 from #12 and Dash is at from #14 from #13. Sadly NEM, Dash and IOTA, are out of the Top Ten altogether, and have been replaced by EOS at #6, Tether at #8 and Bitcoin SV at #9.
Total Market Cap and Bitcoin Dominance
It will come as no surprise that November’s total cryptocurrency market cap performance was woeful. Awful. Nightmarish. $75 billion of value left the markets, roughly -36%. That’s more than the total GDP of Slovenia, Bahrain, Latvia, and over 100 other countries. The cryptocurrency markets also hasn’t ended a month above $300 billion since May 2018. Bitcoin dominance has held since September, however, at 53%.
Conclusion – The End in Sight?
As the author notes, tracking, and investing in Top Ten by market cap continues to be a losing strategy. Compared to the entire market being down -77%, the Top Ten are down -84%. Moreover, the S&P 500 has performed significantly better, returning 3.3%. Despite this, the fundamentals underpinning projects like Stellar seems to be paying off – losing only -50% of its value since January, and outperforming the market. Whether we have reached bottom is another story altogether.