September 2017 Recap
If you didn’t catch my introductory post explaining why I’m creating and tracking different Cryptocurrency Indices, check out my first post in Month 1. https://steemit.com/cryptocurrency/@maskedrider/cryptocurrency-index-investing-experiment
A quick recap, I’m using the top 10 coins in coingecko.comand starting out July 1, 2017 with $10,000 paper money into 3 different index strategies and track which performs the best.
- Equal Weighting - This is the most straightforward way to allocate the 10 positions. Each receives an equal weight, $1,000 spread out over the 10 coins.
- Market Cap - This allocation takes the total market cap of the top 10 coins, divides the individual market cap of each coin by the total and ranks the allocation accordingly.
- Coin Gecko - This takes the Coin Gecko ranking and divides by the total rating of the 10 coins and allocations the portfolio.
Everything in the index was down across the board in September. Believe that’s the first month since I’ve began tracking the index that every coin has been down. Even the “professional” indices that I track to compare this experiment too were all down, except the stock market as measured by an S&P 500 ETF, VOO specifically.
That’s why we diversify, that’s why we not only diversify across coins but we need to be diversified across asset classes. You shouldn’t have your entire investment portfolio in crypto, or stocks or bonds or cash or commodities. Diversify, diversify, diversify!
Dodgecoin dropped out of Coin Gecko’s Top 10 and was replaced by IOTA. Dodgecoin was liquidated out of the indices and all 3 indices were rebalanced.
Equal Weighting - finished September down to $11,163.38
Market Cap Allocation - finished September down to $14,286.06
Coin Gecko Allocation - finished September down to $11,756.68
The above graph tracks investments in the Equal Weighted Index, Market Weighted Index, Coin Gecko Weighted Index, CRIX index, BLX(Iconimi) and VOO(Vanguard S&P 500 ETF).
*quick editorial note, the CRIX index website was down at the time of this writing, if and when it comes back up I will edit appropriately.
In September 2017, you would have had the greatest return by investing the S&P 500. While not a great return, the S&P 500 was positive, while every crypto index was negative in September.
As always, would enjoy any comments, questions or suggestions on how to improve this experiment and I look forward to further tracking these. Until next month.