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Top 10 cryptocurrencies or stocks – an investor experiment
As an experiment, a crypto investor observed the dynamics of investments in the amount of $ 1000 in the top 10 cryptocurrencies.
At the end of 2019, its profit amounted to 53.8%, significantly outstripping the stock market.
However, in the longer term, the situation looks less clear..
The crypto investor shared the results of an experiment, during which he tried to find out which assets bring higher returns – stocks or cryptocurrencies.
Cryptocurrency investor Joe-M-4 shared on Reddit the results of an experiment he conducted to compare the performance of various assets. At the end of 2019, a dozen top cryptocurrencies brought him a higher income than investments in the stock market.
2019 favored cryptocurrencies
As Joe-M-4 said in his post, in January 2019, he invested $ 1,000 in the purchase of coins that formed the top 10 cryptocurrencies at that time. Then he began to observe the dynamics of these assets, comparing their profitability with investments in stocks of companies that make up the stock index S&P 500.
At the end of last year, cryptocurrencies turned out to be more profitable than stocks, bringing Joe-M-4 a profit of 53.8%. Accordingly, the $ 1,000 invested in them turned into $ 1,538 in 2019.
During the same time, the dynamics of shares of the index S&The P 500 grew 35%, turning $ 1,000 into $ 1,350. In addition, Joe-M-4 added, despite a tough last month for the crypto market, the top 10 digital currencies of 2019 still outperform the stock market in terms of profitability..
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However, as Joe clarified, during his experiment in the crypto space, there have been many changes. Most of the currencies he invested in in January 2019 have appreciated in value since then. In particular, this applies to Bitcoin, Ethereum, Bitcoin Cash, EOS, Bitcoin SV, Litecoin and Tron.
However, Stellar and XRP rates showed drawdown. Meanwhile, stablecoins – in literal translation from English “stable” coins – continue to gain popularity in the digital asset market. With … More Tether, pegged to the US dollar rate, remained flat. In addition, some cryptocurrencies during this time flew out of the top 10 ranking, giving way to such new coins as Polkadot and DeFi giant Chainlink..
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Moreover, in a broader perspective, the comparison results also change. If we evaluate the indicators of profitability over a 3-year period from 2018 to 2020, the stock market breaks ahead, albeit by a small margin..
The total return on investment in cryptocurrencies ($ 1,000 each year) is currently already more modest 11%, turning $ 3,000 into $ 3,340. This is largely due to the 76% drawdown at the end of the harsh 2018, which depreciated the invested $ 1,000 to $ 238.
Over the same 3-year period, similar investments in S&The P 500 would turn into $ 3,660, showing a 22% gain.
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