Inspired by this post, I built a script to analyse if you DCA'd blindly in the top crypto coins vs. investing in BTC & ETH vs investing only in BTC since the beginning of 2015, how much would your total worth is. Here are the results.
Numbers & assumptions:
- DCAing takes place every week, on 1st, 8th, 15th and 22th of every month starting from Jan 1st 2015 and until July 6th 2021.
- Investments budget per week is $100.
- The weekly investment is divided equally on the coins invested in.
- This case study is ignoring stable coin investments. E.g.: investing in the top 5 coins means the top 5 coins excluding any stable coins.
- The analysis is assuming that you invested your money and never sold any coin till now.
- Total invested money over the whole DCA period is $31,300.
- Transaction fees are not included in the analysis.
Here are the results:
- If you blindly DCA into the top 1 coins (BTC), you will end up with $1,102,104.
- If you blindly DCA into the top 2 coins, you will end up with 4 coins (BTC, XRP, LTC, ETH) in your wallet and total worth of $1,462,443.
- If you blindly DCA into the top 3 coins, you will end up with 11 coins in your wallet, and a total worth of $1,310,552.
- If you blindly DCA into the top 5 coins, you will end up with 23 coins in your wallet, and a total worth of $2,490,189.
- If you blindly DCA into the top 7 coins, you will end up with 37 coins in your wallet, and a total worth of $2,923,849.
- If you blindly DCA into the top 10 coins, you will end up with 55 coins in your wallet, and a total worth of $2,316,169.
- If you blindly DCA into the top 20 coins, you will end up with 130 coins in your wallet, and a total worth of $1,619,756.
- If you blindly DCA into the top 50 coins, you will end up with 381 coins in your wallet, and a total worth of $979,086.
- If you had a glass ball and knew that ETH will be what it's today and you invested only in BTC & ETH, you will end up with 2 coins in your wallet (surprise), and a total worth of $4,505,477.
Some observations:
- Although it was relatively easier to guess that BTC will be the #1 crypto coin back then, nobody would have guessed for sure that ETH will be #2, so betting on BTC & ETH only from the beginning would've been your strategy only if you know the future. (you are God). Based on that it's safer to say "I invest in the top X coins" instead of saying I only invest in coin X and coin Y.
- Investing in altcoins in addition to BTC can increase your ROI considerably. Investing in top 7-10 coins tends to yield the most return in this case study (x3).
- Based on #2, a crypto ETF (or a similar service from exchanges that allow us to buy in bulk) could give exposure to the top X coins while saving transaction costs considerably.
If you want more details, here is what your wallet would look like in each case of the above:
https://drive.google.com/file/d/1-aRmJBZlb9azXHODN3WFkIVzwxepH3GV/view?usp=sharing, https://drive.google.com/file/d/12v45_cy4hNSiEklZj042SDsgfnKObr4i/view?usp=sharing, https://drive.google.com/file/d/1EwFvusdGrOVdagvXqAXrAw0BTUZmKowG/view?usp=sharing, https://drive.google.com/file/d/1R8hZs7IYED8ksjyera37gWJLzRzcPAXE/view?usp=sharing, https://drive.google.com/file/d/1bRijSf8sZ9J3bIGBY-iiGAQjgbL-vPzu/view?usp=sharing, https://drive.google.com/file/d/1k4ONNzFqXJ96t9S2xKR8SD88VSMBXYim/view?usp=sharing, https://drive.google.com/file/d/1o_7Nd8TcyfkVS2-OUAvStObUjk-x4j0c/view?usp=sharing, https://drive.google.com/file/d/1xIZv0DpMBO18LgHg-OFKo41WgHiYRFUf/view?usp=sharing, https://drive.google.com/file/d/1yGKbXeS6DZic6A1PmM5sGA2A3CZOyzUp/view?usp=sharing
IMPORTANT NOTE: This whole case study was a fun project and i was trying to answer some questions and thought to share it with you in case that would help you in any way. Also it's important to not that history does not dictate the future, so please take all of what I present here with a grain of salt.
Much Love! β€οΈ
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