Top 10 cryptos experiment still pays off big time after 5 years

Investing in the cryptocurrency market can be full of difficult choices and FOMO when deciding which cryptos to buy and hold. That's why many long-term investors adopt an index strategy, buying a group of well-performing assets consistently instead. This protects against risk since, usually, if one or two of the assets in the index do badly, the performance of the rest will compensate for it. Is this strategy an effective hedge against the volatility of the crypto market? One five-year experiment appears to show that it is.

In 2018, Redditor Joe Greene began the Top 10 Cryptos experiment, documented on social media for all to see. He bought $1,000 of the top 10 cryptocurrencies by market cap at the time: obviously Bitcoin (BTC) and Ethereum (ETH), but also Dash, Iota and other altcoins.

In the first year, it did not perform well, with that $1,000 crashing down to $150. However, Greene kept at it, put $100 into each of the top 10 cryptocurrencies on New Year's Day every year since, including 2019, 2020, 2021 and 2022, and just held on, no selling or exchanging. He monitors the performance of the investment and regularly publishes results on his website and on Reddit. Five years on, this tactic has paid off huge dividends.

Tactics from Wall Street

Like many others at the time, Greene became interested in Bitcoin when the price hit runaway highs during the 2017 bull market. He noticed that the crypto community was full of get-rich-quick schemes promising unrealistically high short-term returns on many, many different coins, but that wasn't for him.

Greene was already an experienced stock investor before the crypto market took off, and his approach followed the famous advice offered by Wall Street titans such as Warren Buffet: stick to low-risk, highly diversified index funds. It's a common strategy in investing as opposed to trading, and while it typically doesn't provide the highest possible returns, it is noted for performing well versus market vicissitudes in the long term.

However, crypto indices were generally not available for purchase at the time Greene started the experiment, so he made his own based on the top 10, following the principle of dollar-cost averaging. He purchased $100 from the top 10 each year, regardless of what its market price actually was.

The payoff

In its fifth year, Greene's DIY crypto index model can boast returns of a cumulative 87%, outperforming the S&P 500, which clocks in at 24%. Some years have done better than others, of course. According to his reports, the 2019, 2020, 2021 and 2022 Top 10 crypto portfolios have respective returns of +126%, 338%, +177% and -69% to date. Obviously, 2022 is not a strong performer, but it is more than made up for by the indices from the other years.  He also noted that if his index could have somehow tracked the entire crypto market over the same period, it would have yielded 224% growth. Not every year has done well.

The best way to do crypto index trading

When this Redditor started his experiments, crypto index trading was not offered by online platforms. Nowadays, however, it's a different story. In fact, StormGain offers a range of crypto indices for investors who would like to try this approach or for traders who want a hedge against market volatility in their portfolio.

StormGain features several curated index options: one with the top 3 cryptocurrencies, one with 10 cryptocurrencies (if you want to follow Greene's strategy) and one in between. Available as a smartphone app and on the web, StormGain is fast, easy to use, and offers unique bonuses, such as interest on crypto holdings and a built-in Bitcoin cloud miner. Not a StormGain user yet? Sign up in just a few seconds to access these great crypto index funds, as well as low-commission trading on 50+ digital assets.