Homebrewed Cryptocurrency Mutual Fund Experiment

in cryptocurrency •  8 years ago 

Like many people, my initial interest in cryptocurrencies was piqued by day dreams of investing in an up-and-coming cryptocurrency and striking it rich with 1000%+ ROIs. I watched the spikes in Bitcoin and imagined my ocean-side retirement life if I had only invested x amount of USD at the beginning. The logical next step was to identify the cryptocurrency that was set to go "to the moon". Instead of making naive predictions about which one crypto was next to undergo a wild upswing (essentially gambling), I elected to distribute my risk/reward in a slightly more distributed manner.

The approach is simple: split my monthly investment evenly between the top 10 cryptocurrencies (by market capitalization).

I selected a once-per-month investment pattern because I felt that it represented a reasonable time investment for the average person. Doing these investments by hand will take several hours, which is prohibitively long to be doing on a daily or weekly basis. Investments were made into the top 10 cryptocurrencies on the first Sunday of each month. Additionally, less frequent investment patterns are less likely to fall victim to the random hypervolatility of cryptocurrencies (although it is still possible).

For this example, I will be using an investment of $100/month. Therefore, $10 into each cryptocurrency. Below are the results as I have tracked them for the past 19 months (as calculated about 2 weeks ago):

Investment: $1900
Total current worth: $3440
ROI: 81%

Given that each month the top 10 cryptocurrencies vary, I have investments across 23 different currencies:

BTC 0.41633793
ETH 68.78251893
XRP 27248.67751
LTC 49.1088437
DAO 185.4925151
XEM 13084.78064
DASH 38.71488867
MAID 3288.960209
DOGE 676175.825
LSK 54.40218771
DigixDAO 0.996015936
XMR 31.95554511
XLM/STR 39021.04457
BTS 21112.39021
FCT 11.52508693
PPC 96.65718738
NXT 3030.598348
BANX 16.36696096
BCN 294623.6559
STEEM 198.6498669
ETC 49.37014016
REP 7.595983642
WAVES 28.17798341

Here is the amount I have made or lost from each currency:

BTC 193.8677348
ETH 571.4755541
XRP -6.507405629
LTC -0.930951764
DAO -20
XEM -1.049835621
DASH 400.7892011
MAID 245.1291016
DOGE 9.96839578
LSK -11.46130463
DigixDAO -1.075697211
XMR 305.0643186
XLM/STR 2.323791459
BTS -20.91298628
FCT 16.64977645
PPC -13.2218995
NXT -22.5770901
BANX -40
BCN -6.447311828
STEEM -27.81236476
ETC 8.624494816
REP 4.789605081
WAVES -2.979511788

As shown above, my big money makers were Ethereum, Dash, XMR, MAID, BTC.

I believe that this technique can be understood and executed by the average college-educated American. The most challenging part is setting up a wallet for each cryptocurrency and understanding how to work an exchange and transfer currency to/from wallets. This idea is nothing groundbreaking, but I believe the simplicity displayed here makes it accessible to those who have not yet become involved.

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Out of the crypto groups/funds out here's a good one to aspire to with your project:
Brian Beamish's http://www.therationalinvestor.co/

Very good blog. Interesting to see I'm not the only one that is thinking about this. It's surprising how much uneducated investors the crypto space has. You still see people invest in this shady and scammy coins. I was researching a way to find more info about the current cryptocoins on the market. I found this great website: https://www.coincheckup.com They seem to give this complete indepth analysis of all cryptocoins. On: https://www.coincheckup.com/coins/DigixDAO#analysis To watch DigixDAO Research report