DAY 0: CRYPTO200 Experiment Begins

Ever wonder what would happen if you simply diversified across the top 200 cryptos by market cap?

Well, wonder no longer! The CRYTPO200 Experiment has begun...

tl;dr: 5 diversification strategies across the top 200 cryptos competing for best performance- you can follow along on the doc linked below.

So here's the basic premise:

I'm pitting 5 different (yet fairly simple) diversification strategies against each other for a no-holds-barred, battle to the death. I'm not suggesting people should actually go and do this... it's more of a curiosity project than anything else.

What's the purpose?

If you're anything like me, you probably believe that, although volatile, the crypto market is here to stay and what's more, is going to continue to grow. I fit into this market as a self-described hodler (for the most part) and dabble in most of the majors and quite a handful of the minors. Generally, I try to go for projects/companies with a long-term view... but like any doe-eyed trader, am often enticed by ups, downs, hype, fud, fomo, and I'm sure a raft of other acronyms.

To keep myself in line, I've broken my portfolio into two parts: the "hodl" and the "dawdle". The "hodl" is pretty self-explanatory and consists of around 10-15 crypto assets that I fully believe in and will likely never touch til I'm ready for retirement. The "dawdle" is what I use for trading, time-wasting, going into ICOs and occasionally purchasing things (mostly to prove to my friends that it is technically possible to buy things with crypto). The dawdle represents an ever shifting, wide array of various cryptos - MUCH more diversified than my hodl... and this is where the story begins.

Here's what I found: not counting the trading side of things, my dawdle holding value tended to be much more stable than my hodl - due to the larger diversification that my dawdle represented. So it got me wondering... what if one were to simply invest long term in the crypto market cap? Could one safely enjoy the growth of the crypto world through large diversification?

I quickly decided that attempting to diversify into 1500 odd coins wasn't really doable, but 200 is definitely reasonable and feasible. But that then posed another dilemma: how much should go where?

Well... no better way to find out than test!

And so begins the CRYPTO200 Experiment...

Here are my self-imposed rules:

1. Each strategy must use all 200 coins
   1. Not including Tether
   2. Not including Bitconnect (Not going into why... just simply, it's not included)
2. The 200 coins were selected by market cap on 28/01/2018
3. The project began on 30/01/2018
4. Assume no trading - only hodling strategy - close your eyes and ride the waves

Meet the 5 competitors:

"The Even Steven"

• equal weight given to all 200 coins
• 100% exposure to top 200 (0.5% exposure per coin)

"The Hundo/Hundo"

• diversification weighted towards the top 100 by market cap
• 67% exposure to top 100 (0.67% exposure per coin)
• 33% exposure to 101-200 (0.33% exposure per coin)

"The 4-3-2-1"

• weight declines every 50 coins
• 40% exposure to top 50 (0.80% exposure per coin)
• 30% exposure to 51-100 (0.60% exposure per coin)
• 20% exposure to 101-150 (0.40% exposure per coin)
• 10% exposure to 151-200 (0.20% exposure per coin)

"The Slip-Away"

• weight declines every 40 coins
• 33.33% exposure to top 40 (0.83% exposure per coin)
• 26.67% exposure to 41-80 (0.67% exposure per coin)
• 20% exposure to 81-120 (0.50% exposure per coin)
• 13.33% exposure to 121-160 (0.33% exposure per coin)
• 6.67% exposure to 161-200 (0.17% exposure per coin)

"The 1-2-3-4"

• weight increases every 50 coins (basically the opposite of "The 4-3-2-1")
• 10% exposure to top 50 (0.20% exposure per coin)
• 20% exposure to 51-100 (0.40% exposure per coin)
• 30% exposure to 101-150 (0.60% exposure per coin)
• 40% exposure to 151-200 (0.80% exposure per coin)

I'm assuming I'm not the only one curious to see how this progresses and if you've read this far, I guess it means that this experiment is of interest to you too. So if you want to follow along, I'll be posting progress updates as regularly as I can and you can track exact progress on the following doc (it updates with CMC values throughout the day fairly regularly):

https://docs.google.com/spreadsheets/d/1nzOTQlNirWf05pagTnyJSOKwH_NljV8nqBXI2R90kpw/edit?usp=sharing

If you've got any predictions or have ideas for diversification strategies that would be interesting to test, I'd be glad to hear them.

Let the battle begin!