Cryptocurrency Experiment – New Set of Coins, End of Year Update
As we approach the new year, the cryptocurrency markets are booming once again. It seems like all major altcoins are surging, and Bitcoin itself is approaching $20,000. At this point, my cryptocurrency purchase experiment is approaching the five month mark. I had purchased coins in three separate batches, but now I’ve just added a fourth. I had some cash that was just drifting in a Scottrade account, so I decided to move that into cryptocurrency. I’ve now got 35 total coins involved in this experiment. Before I go on about this update, let’s touch on some background.
Previous articles on this cryptocurrency experiment:
I originally purchased 16 different coins in August 2017. A few weeks later, I bought five more bringing the total to 21. At the beginning of December, I moved some money that was languishing in a Scottrade account into Bitcoin, and made two more purchases of six and seven different coins from that pool. Adding the Bitcoin Gold I received from a BTC fork, that brought my total to 35 coins! Quite a few more than I initially planned, but I feel pretty good about this collection now. There were some coins, like Ripple, Waves, XLM, ADA, XSPEC, and others, that I just couldn’t stand by and not purchase; there was too much positive buzz on forums about them.
Because I now have such a wide spread of purchases across several months, I decided to refine my graphs a bit. The percentage change and dollar value change graphs are still sorted by purchase date from left (oldest) to right (newest), but now have time period groups at the bottom. These charts are still color-coded, with orange representing “the big boys” (primary trading coins), blue for potential windfalls (cheap coins I bought a lot of), and gray for everything else.
Figure 1. Dollar value change from initial purchase to current value (as of 12/16/2017), sorted and grouped by time since initial purchase.
Figure 2. Percentage change from initial purchase to current value (as of 12/16/2017), sorted and grouped by time since initial purchase. Note: This may differ significantly from dollar value change, as coins were purchased in highly varied amounts.
As you can see from these graphs, some of these new coins have already started booming. As I mentioned above, there were some coins that were being recommended and discussed broadly across many forums; these are the coins that are spiking now. In only three days, a couple of them have grown as much as my coins from a couple months ago. I’m starting to get the impression that, while some random threads about a coin might not mean anything, to see something like Ripple being talked about in every forum you visit is a great indicator for possible growth.
Figure 3. Left: Current percentage of holdings based on USD value, as of 12/16/2017. Right: Percentage of holdings at the time of purchase based on USD value.
I’ve included pie charts for my overall portfolio above, showing percentage of holdings currently and at the initial purchase. Comparing these two should show how growth has changed the distribution of what I’m invested in.
I have also developed a new visualization, which is very similar to my percentage and dollar value growth charts. Instead of sorting and grouping by date purchased though, these new graphs are sorted by total market capitalization (as provided by Coin Market Cap) and grouped by large, mid, and small cap amounts. These new market cap/growth graphs are featured below:
Figure 4. Dollar value change from initial purchase to current value (as of 12/16/2017), sorted and grouped total market capitalization. Market capitalization values obtained from https://coinmarketcap.com/.
Figure 5. Percentage change from initial purchase to current value (as of 12/16/2017), sorted and grouped total market capitalization. Market capitalization values obtained from https://coinmarketcap.com/. Note: Percentage may differ significantly from dollar value change, as coins were purchased in highly varied amounts.
I’m not sure if there is much that I can extrapolate yet from this market cap/growth setup. It does seem like the biggest percentage growth coins are coming from the medium sized market caps; these might be the best coins for potential windfalls (large number of coins, smaller USD investment). In terms of raw dollar value growth, it’s more of a mixed bag, but it seems most comes from the large market cap coins.
The final item I wanted to mention was an Android app I’ve been using to watch my investments. It’s already fairly popular I think, but I just learned about it. The app is called “Blockfolio,” and it’s very well done. If you have a variety of coins spread across multiple wallets as I do now, it’s helpful to have one place to view market changes. I really like that Blockfolio doesn’t ask for any account or wallet information, and doesn’t require any permissions from Android. It’s just a manually populated value tracker, which is perfect. I love that you can also sort by name, total value, or percentage change. Even accounting for multiple purchases over time, it will even tell you your overall profit or loss. I track the same information in a spreadsheet, but it’s nice to have an app that does it as well.
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Reblogged this on Crypto Millionaire Mindset.
Jon,
The coin stats app is worth checking out, as an alternative to Blockfolio.
It’s a portfolio tracking tool that I really enjoy using.
Very interesting read Jon and an even more interesting experiment that you are running!
I hope it continues to go well for you, best of luck with it 👌
Much appreciated Matt! Thanks for checking it out
Very interesting. I’ve been hearing a lot about bitcoin recently. I do agree with your additional comment. Wishing you success and an enjoyable ride.
Thanks Linda, I’m glad you found it interesting. Bitcoin is certainly popular; I believe I read somewhere it was the 2nd most searched term on Google in 2017.
My biggest rule of thumb on all this cryptocurrency stuff is, don’t invest anything you aren’t willing to completely lose. It’s so volatile, you just never know what’s going to happen with it. Some of these coins have increased by 1000% or more just this year, which is completely insane!
Just to add a little commentary to this, it seems like we’re due for a dip. Not a crash, not a “bubble burst,” but for some coins to level out or drop somewhat. As exciting as all of this growth is, it just wouldn’t make sense for it to continue nonstop. But, as I’ve said in previous articles on this, my goal with this experiment is a long term hold. So I will definitely ride out any dips, dives, crashes, etc.
Hey Jon. You’ve done well with your spread so far and have some nice returns with Einsteinium and Monacoin. What made you choose certain coins over others? Picking a half dozen coins and sticking to a couple of high market cap coins like ETH or DASH is probably the best way to diversify, but thats no fun! And I see that you plan to hold long term, so your smaller market cap projects will eventually catch up once they’e good projects. I did a similar experiment with a trivial amount of cash to start with. Even though the fiat value of my portfolio is up 130%, holding bitcoin instead would have seen my return closer to 240% over last 5 months.
Hey there Cathal – yes, there have definitely been some nice returns on a few of these previously lower market cap coins! And you’re right, that’s where the real fun is, I think. Buying coins that have already become huge probably gets you something more reliable, but it’s fun seeing some random altcoin come from nowhere. I have to admit though, some of these small cap coins that I’ve bought have done pretty much nothing, like LBRY Credits, Gulden, and a few others.
As for how I picked them, that has changed over time. At first (in August), I was picking coins mostly based on whether they were available in Coinomi and were cheap. As the experiment progressed though, I focused more on finding altcoins receiving lots of positive buzz on forums; primarily on bitcointalk.org, several large subreddits, and NeoGAF (before it imploded…after, some on ResetERA). That has been a MUCH more effective method! I wish I’d done the forum research from the start.
Jon, the limitations of choosing only from coinomi or your chosen exchange, is one I can relate to.
LBRY is still a very promising coin. Stick with it long term.
Twitter and Reddit are super quick to feed crypto news and market events (I’ve never heard of NeoGAF but will look into it more)
I will be tracking your progress and wish you every success.
Do you have an exit strategy ready to go? My sentiment is that this bubble will burst soon.
Then again, they’ve been saying that for years!
Ha ha, yes they sure have been saying the bubble will burst “any day now” for quite a while. I guess I’m bullish on crypto overall, so I don’t really think it’s necessarily a bubble in the conventional sense. Since currency has no intrinsic value (like a home or a company does), it’s hard to nail down when it’s really overvalued. Should a Bitcoin be worth $20,000? Should it be worth $.005? Who really knows! I honestly didn’t think Bitcoin had staying power a couple years ago, but it’s still picking up steam. Of course, I thought the iPad was a stupid idea too, so it shows what I know.
I appreciate all your comments! Good to see an active blog like yours that’s writing meaningful articles about this trend. Your content is great, which I can’t say for some other Bitcoin/altcoin focused blogs out there that seem to just regurgitate news articles.
Oh, and probably no need to check out NeoGAF at this point. The site is basically a ghost town now; mostly I think because the owner had some assault or harassment allegations against him. The majority of their active user base migrated to another site called ResetERA. It’s not as active as old NeoGAF, but it’s a decent forum for a wide variety of topics.
Just replying to my original comment up top…and here is the large drop! This is why it’s best not to look too much at long term holds, because corrections can be scary. Literally hundreds of dollars in value wiped over two days. On the flip side, of anyone wanted to start with cryptocurrency, now is probably the time, as prices have fallen for almost all coins