Cryptocurrency Portfolio Weighting Strategies

This chart shows the historical performance of differently weighted portfolios when lump sum investing at a certain date. If a coin did not exist at a given starting date then it is ignored until its data becomes available. On the date that its price data becomes available all assets will be re-weighted according to the market caps on this date.

The "Market Cap" line shows the portfolio performance if you had weighted your investment by market cap at the date of investing. Based on this approach you first calculate the sum of market caps for the basket of assets used, then you calculate the percentage that each asset's market cap contributes to this sum and then you allocate this percentage of your lump sum amount to this asset.

The "Ln(Market Cap)" and "Sqrt(Market Cap)" are similarly calculated as the market cap method but instead of taking the sum of market caps we now take the sum of Ln(market caps) and Sqrt(market caps). The individual percentages are determined by the contribution of the asset's "Ln(Market Cap)" and "Sqrt(Market Cap)" to the total sum.

The equal amount strategy simply invests an equal amount in each asset.

The default options shows the portfolio performance if you would have invested $1000 in the top 10 cryptocurrencies at the 2018 bear market bottom. The "Options" button allow you to configure the variables. The pre-defined dates will select the assets that belonged to the top 10 cryptocurrencies on those dates. Below the main chart there is a table that shows the amount invested in each asset for every strategy.

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Disclaimer: The information presented within this video is NOT financial advice.

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