On the last post i showed how was structured the Crypto Ecosystem Portfolio and its allocation.
Today I will write about the Crypto Portfolio returns year-to-date. And why it is important to be invested on the broad crypto market.
Before starting I would like to point out what is the goal of this portfolio. The idea behind it is to have a passive investing vehicle across all the crypto landscape. In fact it should be considered as an index. The Crypto Index.
When you invest in indices, be it the S&P, ARK’s ETF or Blackrocks iShares. The idea is not to make a quick buck. It is a long-term investing plan and capital preservation with a focus on the broad market. Like the US Economy for the S&P, and Innovation field for ARK.
So yes. You will be in a big way diversified and you could be potentially missing on gains. But also, you will see that you can obtain a high return with a low volatility and reduced risk with this kind of portfolio.
Crypto is an ever-changing world. One day on crypto is like a week at traditional markets. Every morning you have new emerging projects claiming to be the next big thing, or millionaire hacks and exploits, Governments/Corporations/Influential people positioning for-or-against crypto. Extreme FUD and FOMO on markets, Volatility and an infinite amount of events that occur simultaneously on the markets that are always open.
Crypto is hard. And to keep pace with all that is even harder. That is for needed a simple index framework for long-term bullish investors of the crypto world.
Having said that, here are the YTD returns of the Crypto Index over a 6 month period (9/06/2021).
As you can see the Portfolio had a total return of 415% Year-to-date and a +26% Monthly Compounded Growth Rate.
To put that in perspective, Bitcoin made 16.5%, Ethereum 250%, S&P500 14% and Gold 2%. So it beat all the benchmarks assets by several multiples.
The best performing asset class whas Layer 1’s Protocols with a weighted return of +1140%.
Decentralized Finance and Data had quite similar returns with +200% and +155% respectively.
Currencies have not kept the pace and had a 16.5% return YTD.
It should be remarked that in the DeFi asset class, the best performing sectors where NFT’s (+540%), followed by Payments (+260%) and Decentralized Exchanges (+250%).
While the Insurance sector lagged and returned a mere weighted (+60%) return YTD. Good thing it had the lowest allocation on the portfolio representing only 2.5%.
With these types of allocations and diversification it has made us catch several key trends of the market during the year. Such as the NFT mania of March with Enjin (+850%), Decentraland (+725%) and The Sandbox (+630%).
The DeFi Summer with Terra (+750%), MakerDao(+450%), Thorchain (+585%) and Aave (+250%).
And with the Ethereum congestion came the Layer 2 and scalability solutions. With Polygon(+7300%), Solana (+2200%), Fantom (+1550%) and Cardano (+770%).
To be honest I have not idea of what could be the next crypto trends. Maybe Bitcoin adoption by countries and Corporate continues. Could be a Polkadot season with Parachain’s launching soon. Or even a new DeFi summer with Yield Farming composability and big money adapting on it.
Could be anything but you can be assured that you will be invested on the next trend. That is the type of security a index produces.
Except Meme coins and dog tokens. I don’t like them, I don’t buy them and you should understand why. I didnt expect that level of craziness those coins. I should YOLO’ed into those tokens that rallied to the moon with Dogecoin (+5500%), Safemoon (+3500%) and Shiba (+11.500%).
As always any of this is financial advice and you must DYOR always.
Stay Tuned!
