A year ago, I bought a small amount of every cryptocurrency available to me in hopes that at least one would explode in value, catapulting me into the world of obscene wealth having risked very little. Did it work? It did not.
I began by writing some software that would take a budget and split it evenly among all the assets available to buy. After testing was complete, I ran it for real on April 5th, 2021, placing market orders for 46 individual assets. Another bit of software would query the value of each asset each hour for one year. At time 2022-04-06T05:49:29Z (9:49pm on April 5th where I was), it had recorded one full year of portfolio values.
First, let’s take a look at the performance of the portfolio as a whole. I’ll be using normalized values to discuss how values changed over the year, both for privacy and because the initial value of each asset varied slightly in the time between the orders being filled and the first value snapshot, leaving the data a bit messy. We’ll call the value of the portfolio at 2021-04-05T05:49:29Z, the first value snapshot, 1.00.
At the end of the experiment, the portfolio reached its final value of 0.72 or 72% of its initial value. While I expected this experiment to leave me obscenely rich, it instead robbed me of 28% of my initial investment.
Let’s dig deeper and check out the performance of the assets themselves. The following chart shows each asset’s minimum, maximum, and final values, similarly normalized to the initial value of each asset.
Asset | Min | Max | Final |
|---|---|---|---|
AAVE | 0.28 | 1.64 | 0.54 |
ADA | 0.62 | 2.54 | 0.95 |
ALGO | 0.48 | 1.72 | 0.63 |
ANT | 0.23 | 1.16 | 0.44 |
ATOM | 0.37 | 2.01 | 1.33 |
BAL | 0.17 | 1.24 | 0.26 |
BAT | 0.36 | 1.53 | 0.67 |
BCH | 0.41 | 2.50 | 0.56 |
COMP | 0.18 | 1.76 | 0.29 |
CRV | 0.33 | 2.01 | 0.83 |
DAI | 1.00 | 1.01 | 1.00 |
DASH | 0.29 | 1.72 | 0.46 |
DOT | 0.24 | 1.22 | 0.48 |
EOS | 0.28 | 2.10 | 0.39 |
FIL | 0.09 | 1.08 | 0.14 |
GNO | 0.67 | 3.73 | 2.36 |
ICX | 0.22 | 1.17 | 0.36 |
KAVA | 0.32 | 1.20 | 0.58 |
KEEP | 0.30 | 1.64 | 0.92 |
KNC | 0.32 | 1.18 | 0.88 |
KSM | 0.24 | 1.37 | 0.40 |
LINK | 0.36 | 1.62 | 0.52 |
LSK | 0.22 | 1.78 | 0.37 |
MANA | 0.39 | 5.92 | 2.54 |
NANO | 0.29 | 2.79 | 0.48 |
OCEAN | 0.20 | 1.18 | 0.36 |
OMG | 0.35 | 2.35 | 0.63 |
OXT | 0.24 | 1.03 | 0.34 |
PAXG | 0.99 | 1.19 | 1.10 |
QTUM | 0.37 | 2.77 | 0.62 |
REPV2 | 0.22 | 1.32 | 0.34 |
SC | 0.23 | 1.78 | 0.37 |
SNX | 0.15 | 1.12 | 0.27 |
TRX | 0.34 | 1.28 | 0.50 |
UNI | 0.24 | 1.42 | 0.35 |
XETC | 0.98 | 9.44 | 2.53 |
XETH | 0.81 | 2.28 | 1.58 |
XLTC | 0.42 | 1.83 | 0.54 |
XMLN | 0.44 | 1.88 | 0.58 |
XREP | 0.27 | 1.32 | 0.34 |
XTZ | 0.34 | 1.45 | 0.58 |
XXBT | 0.49 | 1.17 | 0.77 |
XXLM | 0.32 | 1.55 | 0.43 |
XXMR | 0.51 | 1.92 | 0.84 |
XZEC | 0.42 | 1.86 | 0.89 |
YFI | 0.43 | 2.18 | 0.57 |
The three best-performing assets:
MANA), final value 2.54XETC), final value 2.53GNO), final value 2.36The three worst-performing assets:
FIL), final value 0.14BAL), final value 0.26SNX), final value 0.27The three highest values at any time:
XETC), maximum value 9.44MANA), maximum value 5.92GNO), maximum value 3.73The three lowest values at any time:
FIL), minimum value 0.09SNX), minimum value 0.14BAL), minimum value 0.15A few days after starting the experiment, my attention drifted back to normal life. I stopped checking in on the value of the portfolio entirely until a few weeks before it was complete, so I truly had no idea how it had performed in the meantime. By steadfastly refusing to sell until the end, what kind of cash did I leave on the table? What financial disasters did I avoid?
The portfolio rose to its peak value of 1.45 at 2021-05-07T13-49-29Z only a month in. It then quickly dropped to its minimum value of 0.47 at 2021-06-22T13-49-29Z, just about one more month after its maximum value. Surprisingly, these extremes happened in the first three months of the twelve-month experiment, implying a wildly volatile period in the world of cryptocurrency.
The maximum possible value of the portfolio (if I had sold each asset at its highest value) would have been 1.95, a generous one-year return. If I had instead sold each asset at the worst possible time, the minimum possible value was 0.38. Sadly, that ended up being closer to what actually happened.
My experiment didn’t make me boat money. Considering the negative return, I’m actually a bit farther from boat money than I was a year ago. I didn’t risk much, so I’ll be fine.
I’d like to thank Decentraland (MANA), Ethereum Classic (XETC), Gnosis (GNO), Ethereum (XETH), Cosmos (ATOM), and PAX Gold (PAXG) for ending the year with values greater than 1.00. Of the 46 assets I bought, these are the only six with positive returns. While I avoided stablecoins for the purposes of this experiment, Dai (DAI) snuck through. That mistake ended up saving me money: by simply tracking the value of the US Dollar, Dai proved to be one of the best crypto investments available over the last twelve months.
In hindsight, putting the money in an index fund (or just leaving it in my savings account) would have provided a much better return, but I would have given up the chance of hitting it big! It’s like I pulled the arm on a few dozen slot machines for a year and walked out of the casino with 72% of what I came with. And hey, who knows, maybe that’s the best way to think about crypto. ðŸŒ