WHAT IF Series #1 - What if you invested $10 per week in the top 10 crypto currencies since 2013/08/04

I love "What If" scenarios.

What if I invested $10 per week in Bitcoin since 2013/08/04?

What if I invested $10 per week in the top 10 currencies on coinmarketcap since 2013/08/04(selling any coins that drop out and reinvesting in the top 10)

What if I bought $1000 Ethereum at the beginning of the year?

I have many more such questions and some are easy to answer such as the last one. If I invested $1000 in Ethereum at the beginning  of the year it would now be worth $26,785.71 at the time of this writing.

But how do we know which currencies will grow and make such gains? The truth is I don't, not without doing lots of research and following the markets daily.

So I thought What If I believed in the Crypto Currrency market as a whole and invested in that? Would that have worked based on historical data? What currencies would I invest in though?

So I thought What If I invested $X per week in the top Y crypto currencies on coinmarketcap every week. Whenever a currency drops below the top 10 I would sell it and invest that equally across the new top 10 in addition to that weeks $X investment.

Whenever I have to calculate something like this I write a C# application and run a simulation based on historical data. coinmarketcap.com has weekly historical data so I used that. I exported the data and ran a simple simulation on the it.

To answer the question in the title. If you invested $10 per week in the top 10 crypto currencies since 2013/08/04 you would have invested $2000 out of your own pocket. However that would be worth $33,725.37 now.

Note in my simulation I did exclude one currency which jumped into the top 10 then suddenly got delisted. It seems like it was a scam coin. So I thought should I follow this strategy I would probably not have invested in that coin anyway since I will only buy coins that have been around for several months. And doing some research on each coin before purchasing it especially if it appears out of nowhere on Coinmarketcap.

I however made the simulation a little more complex and decided I could buy say the top 10 and only sell if it drops below the top 12 for e.g. and in simulation at least I would have made even more in many What If scenarios.

I also ran the simulation for buy the top 8 or top 15 and other randomly checked scenarios. While I did not exhaustively check every scenario I found that investing in the top 5 and selling if it drops out of the top 5 would have been worth $40,504.56 now. However had I invested only in Bitcoin over the same period on a weekly basis it would be worth $11,744.95 now.

By no means is this any trading advise as the markets could just as easily go down, it just happened to go up over that period. Please do your research and don't just blankly follow any trading strategy/formula. However this is what I am going to do from now and hopefully in a few years time I don't have to run yet another What If simulation on what I could have made.

I will purchase the top 10 based on marketcap. Sell anything that drops below the top 10 and reinvest in the current top 10. I will invest weekly and try not to respond to daily movements. The reason I invest weekly rather than a lump sum up front is due to price averaging. That way I don't invest all my money while the market is on a high and it averages out the lows and highs a bit but if the market is moving upwards I will still gain in the end. Why not the top 5 since my simulation did better? Because the top 5 contains 2-3 currencies that have already made massive gains in the last few years. It's not to say they wont continue this trend but I want to be invested in some lesser currencies as well but that still have the potential for the massive gains made by the top few. It also helps to spread my bets. I will also make sure that any coin that I invest in has been around for at least 6 months and do further research to make sure it is backed by a good development team and a supporting community.

The total coin marketcap on 2013/08/04 was about $1.28 Billion and is now close to $90 Billion. In my personal non processional opinion it will just continue to grow since I believe we have only scratched the surface of what Crypto will become.

I don't want to have to do another What If like this one in 3 years from now and have any regrets.

Note my calculations are subject to calculation errors.