I've been studying cryptocurrency and investing a lot lately. I'm in several Facebook groups on the topic, I read a ton of SteemIt posts about it, I even have buddies like @michaelx, who are deeply entrenched in the crypto/blockchain world that I've had the opportunity to chat with on multiple occasions.
There's been one strategy that's stuck out the most to me that seems like the best way to go, in my opinion.
Unfortunately, I can't remember the name of the person who shared it and I haven't been able to re-find the post from the Facebook group that it was originally posted in... However, it's a simple strategy a not hard to remember.
Basically, it was suggested that I figure out an amount that I'm willing to lose (because cryptos are still a speculative investment) and simply spread that money evenly across the top 8 currencies by market cap. The original poster claimed that he tested top 5, top 3, top 10, and even top 20 and the best result always came from the top 8.
I, not taking things at face value, decided to dig deeper.
I wanted to know, if I had followed this strategy from January 1st of 2017, how much would I have now.
Here's a screenshot of the top 8 from January 1st, 2017:
Of those top 8, 6 of them are still in the top 8 as of today (Nov. 25th, 2017). Since then, Ethereum Classic and MaidSafeCoin have both dropped out of the top 8.
Here's what the top 8 look like today:
NEO and BitCoin Cash have both moved into the top 8.
Here's where Ethereum Classic and MaidSafeCoin sit today:
Now that we know where they were and where they are now, let's look at how much we would have made as of today at various investment levels. ($100, $500, $1,000, and $5,000)
If you were to invest $100 on Jan. 1st, 2017, you'd have $2,652.29:
(A return of 2552.29%)
If you were to invest $500 on Jan. 1st, 2017, you'd have $13,261.44:
If you were to invest $1,000 on Jan. 1st, 2017, you'd have $26,522.88:
If you were to invest $5,000 on Jan. 1st, 2017, you'd have $132,614.42:
These returns are actually understated as well. They don't take into account the value of the Bitcoin Cash and Bitcoin Gold you would have received when the hard forks happened. For simplicity sake, I left those values out but, you'd actually be sitting on a bit more than what's stated above.
Now... Obviously, past returns are not going to be an indicator of future results and this is not investment advice. However, over the past year, had you followed this strategy, you stood to make 2552.29% on your capital.
Hindsight is 20/20 but it seems like a fairly sensible way to get involved in cryptocurrency to me. We're still in the early stages of this technology. Widespread adoption hasn't happened yet so I believe there's still a lot of room for upward movement with the tech.
Just for fun, let's look at the top 8 by market cap from just 3 months ago.
Here's the top 8 on August 27th, 2017 (roughly 3 months ago):
And here's what it would look like, had you invested $1,000 on August 27th:
Yes, you would have lost a little on 2 coins but made it up with the rest and you'd be sitting on a 51.83% Return on Capital over just 3 months...
Again, there's no guarantees of future results but it seems pretty clear to me that this is a safe a lucrative strategy.
To recap, the strategy is to simply pick a number that you're willing to lose if things go downhill and then spread that amount equally across the top 8 coins by market cap.
If you were to start today with $100, you'd put $12.50 in each of these:
- Bitcoin (BTC)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- Ripple (XRP)
- Dash (DASH)
- Litecoin (LTC)
- Monero (XMR)
- NEO (NEO)
Once invested, just leave it alone. Check in maybe once per month.
And that's it...
If you enjoyed what you read here, don't just 'retweet' it, don't just 'like it' elsewhere. Make sure you sign up and UPVOTE it, here on Steemit and share in the rewards! Also, if you enjoy what I put out, be sure to follow me here on SteemIt as well.