The ‘Top 10 Cryptocurrency Portfolio’ Experiment – Even After 5 Years It Delivers Significant Gains.
Cryptocurrency market investing can be littered with tough choices and FOMO (phobia of measures) when it comes to deciding which cryptocurrency to buy and hold. Therefore, many long-term investors choose to use a crypto index strategy, namely: buying a portfolio of assets that perform better. Doing so prevents risk because generally, if one or two assets in the index perform poorly, the performance of the other assets will be able to make up for it. So is the strategy an effective hedge against cryptocurrency market volatility? A 5-year experiment demonstrates this well.
In 2018, Redditor user Joe Greene started a “Top 10 Cryptocurrency Portfolio” experiment and recorded it on social media for all to see. He used $1,000 to buy the 10 cryptocurrencies with the highest market capitalization at the time: of course, Bitcoin (BTC) and Ethereum (ETH) must be among them, along with Dash, Iota, and other altcoins.
In the first year, the portfolio did not perform well, falling from $1,000 to $150. But Green persevered, adding $100 to each of the top ten cryptocurrencies on the first day of the new year in 2019, 2020, 2021, and 2022, without any selling or exchanging operations. Just hold coins. He watches and analyzes the performance of his investments and regularly posts the results on his website and Reddit. Five years on, the strategy has paid off enormously.
Trading tactics from Wall Street
Like many at the time, Green became interested in cryptocurrencies when bitcoin prices reached extreme highs during the 2017 bull market. He noticed that the cryptocurrency community was full of get-rich-quick schemes, with various currencies promising unrealistically high short-term returns, but that was not what he wanted.
Before the rise of the cryptocurrency market, Green was already a seasoned stock investor, following the famous advice of Wall Street titans like Warren Buffett — stick to low-risk, highly diversified index funds. This is a common investment strategy relative to high-frequency trading, and while it usually doesn’t offer the highest returns, in the long run it works well in volatile markets.
However, when Green started his experiments, there were generally no crypto indices available for purchase, so he created his own crypto indices based on the top 10 cryptocurrencies based on the principles of dollar-cost averaging. He buys the top 10 cryptocurrencies ($100 each) every year, regardless of their actual market value.
By year five, Green’s DIY crypto index model had a cumulative return of 87%, outperforming the S&P 500’s 24%. Of course, some of these years performed better than others. According to the report it summarizes, the top 10 cryptocurrency portfolios for 2019, 2020, 2021 and 2022 have returned +126%, 338%, +177% and -69%, respectively. Obviously, 2022’s performance was not strong, but it was more than made up for by gains in other years. He also stated that if his crypto index could somehow track the entire cryptocurrency market over the same period, it would be able to achieve a 224 percent increase. Not every year can achieve high returns.
The best way to trade crypto indices
When Green started his experiments, the online platform did not offer crypto index trading. But now the situation is completely different. The StormGain platform offers a range of crypto indices for investors who want to try this approach or traders who want to hedge their portfolios against market volatility.
StormGain offers several carefully curated index options : an index with the top 3 cryptocurrencies, an index with the top 10 cryptocurrencies (if you want to emulate Green’s strategy), and an index in between. You can access StormGain on your smartphone app or on the web. The platform is fast, easy to use, and offers exclusive benefits such as cryptocurrency holding interest, built-in Bitcoin cloud miner, and more. Not a StormGain user yet? It only takes a few seconds to register, choose to buy high-quality crypto index funds, and trade 50+ digital assets with ultra-low fees.