With 2021 more and more in the rearview, I decided to create my own mini crypto-ETF for 2022 and track its progress throughout the year with monthly updates. I guess you could say that this is more of an experiment than a strategy, and you would be right!
I have invested in crypto here and there during the last few years but never carefully tracked how it moved and the overall return on my money. My goal for this experiment was to have an easily reproducible template that others can follow, or even myself. Below are the parameters that I followed regarding the construction of this ETF:
- Total investment amount: $150
- Distribute money unevenly across the top 20 cryptos by marketcap (excluding stablecoins and XRP)
- BTC and ETH should have at least a 20% combined allocation
- Make the purchase around the beinning of the year
I will walk you through a few choices and decisions I had to make about selecting the allocation percentages that I used. Read until the end to see the final portfolio and my plans for it.
Before we continue, I must warn you that I am not a financial advisor of any kind and this is not financial advice.
I just wanted to share what I am doing for next year regarding the world of crypto. Also, I have sprinkled referral links to different sites, such as Coinbase, BinanceUS, Kraken, etc. If you sign up using those links there is a chance I will a bonus or compensation, but at no cost to you.
With that out of the way…
A Little Explanation About The Parameters I Chose
I am investing a small amount of money to see how this investment performs over the course of a year. After the huge market rally of 2021, I did not want to put down a lot of money near the top.
Typically, I would concentrate on Bitcoin and Ethereum mostly since I like to avoid clutter, but I also want to take advantage of the large movements that small cryptos tend to have. As a result, I wanted to get exposure to the top 20 cryptocurrencies by market capitalization, although with different percentages.
My plan is to allocate roughly $100 to the top 10 and the remaining $50 to the next top 10 coins. That way I can focus on the more established ones while also benefiting from the up-and-coming cryptos.
However, early on I decided to put at least $15 into BTC and another $15 into ETH. Additionally, I made the decision to skip XRP because everything about it is uncertain right now. It is also hard to find an exchange that supports it, at least in the US.
If I had created a weighted portfolio, BTC and ETH alone would have accounted for about 76% of the investment. That would not have worked for me because I wanted exposure to the market outside these giants.
How I Came Up With a List of Contenders
My selection criterion was quite simple: invest in the top 20 coins by market cap. Therefore, coinmarketcap.com was a great tool for this task. I went to the site, which already ranks every crypto by marketcap and manually ignored all stablecoins. There might be a filter to only show non-stable coins automatically but I could not find it.
I thought this was going to be a straightforward process, but I was somewhat wrong. With prices moving fast for the past few days, positions kept shuffling, and sometimes coins dropped out of the top 20 list and new ones entered the list.
My original list looked like this (on December 21st):
There are 21 cryptos showcased above. I gave myself some breathing room and flexibility in choosing alternatives. For instance, I decided to also exclude Tron (TRX) simply because it is not available on Coinbase Pro.
I found out that I could purchase it from Kraken. However, there is a minimum purchase of $10, which is less than my intended allocation. Therefore, it did not make much sense to do all that extra work. If I were to invest a greater amount then I would definitely go the extra mile.
Another issue I encountered was that LUNA is not available directly on Coinbase Pro. Nonetheless, there is a way to get price exposure to it by buying Wrapped Luna (WLUNA), so that’s what I went with.
I spent two days deciding if it was the right time to enter the market, and in the meantime a lot of the coins I was eyeing increased substantially in price. So, remember that usually timing the market is a losing proposition. All the price movement meant that some new coins showed at to the top 20 and in the end, I swapped MANA for ATOM and made the following final list:
| # | Symbol | % Allocation | $ Allocation | Exchange |
| 1 | BTC | 10% | $15 | Coinbase Pro |
| 2 | ETH | 10% | $15 | Coinbase Pro |
| 3 | BNB | 8% | $12 | BinanceUS |
| 4 | SOL | 7% | $10.5 | Coinbase Pro |
| 5 | ADA | 6.5% | $9.75 | Coinbase Pro |
| 6 | WLUNA | 6.5% | $9.75 | Coinbase Pro |
| 7 | AVAX | 6.5% | $9.75 | Coinbase Pro |
| 8 | DOT | 6.5% | $9.75 | Coinbase Pro |
| 9 | DOGE | 5% | $7.5 | Coinbase Pro |
| 10 | SHIB | 4% | $6 | Coinbase Pro |
| 11 | MATIC | 3% | $4.5 | Coinbase Pro |
| 12 | CRO | 3% | $4.5 | Coinbase Pro |
| 13 | LTC | 3% | $4.5 | Coinbase Pro |
| 14 | UNI | 3% | $4.5 | Coinbase Pro |
| 15 | LINK | 3% | $4.5 | Coinbase Pro |
| 16 | ALGO | 3% | $4.5 | Coinbase Pro |
| 17 | BCH | 3% | $4.5 | Coinbase Pro |
| 18 | XLM | 3% | $4.5 | Coinbase Pro |
| 19 | ATOM | 3% | $4.5 | Coinbase Pro |
| 20 | AXS | 3% | $4.5 | Coinbase Pro |
Selecting the Right Exchange
As you can see above, with the exception of Binance Coin (BNB) all the other ones are available to trade on Coinbase Pro. If you want to experiment or make your own purchases, here is my referral link to Coinbase.
The best part is that after creating an account if you make a $100 or higher transaction you (and I) will receive $10 worth of bitcoin as a bonus.
Keep in mind you can still get the bonus even if you purchase $100 of a stablecoin. That’s an instant 10% return on your money! Once you create an account with Coinbase you can use the same one to log in to Coinbase Pro.
Fees on Coinbase Pro are low and if you trade enough per month your rate drops. Since I don’t trade on a regular basis, my fees are the standard 0.50%.
Finally here is my referral link to Binance US. I find Binance to be the best place to buy BNB. However, only use BinanceUS if you are residing in the US. For anyone in other countries, you can use the regular Binance site.
Even though I have not used them for this particular portfolio, here are other sites I have used in the past and where you can purchase a large basket of cryptos:
- Kraken
- Voyager (use code AND79F)
- Gemini
- Celsius
- Public (you can also buy stocks here)
- Robinhood (also for buying stock)
Several of those sites have nice sign-up bonuses. If you are interested in learning more about them, I have another post covering just that. You can also join the mailing list family and you will get notified when I post the next article or when I find something that I believe is useful for readers.
Once I had the exchanges figured out, it was time for me to actually buy the coins.
The End Result
Due to some price fluctuations and fees, the final allocation changed slightly but remained close to my target for the most part. Here it is:
| Symbol | Order Size ($) | Fees ($) | Excluding Fees ($) | Allocation % | Coin Amount | Cost Basis ($) |
| BTC | 15 | 0.07 | 14.93 | 9.86 | 0.00030695 | 48,623.69 |
| ETH | 15 | 0.07 | 14.93 | 9.86 | 0.00378657 | 3,941.66 |
| BNB | 12.70 | 0.01 | 12.69 | 8.38 | 0.023982 | 529.0039 |
| SOL | 10.5 | 0.05 | 10.45 | 6.90 | 0.058 | 179.33 |
| ADA | 9.75 | 0.05 | 9.70 | 6.41 | 7.12 | 1.3616 |
| WLUNA | 9.8 | 0.05 | 9.75 | 6.44 | 0.104 | 93.22 |
| AVAX | 9.79 | 0.05 | 9.74 | 6.43 | 0.08 | 121.33 |
| DOT | 9.8 | 0.05 | 9.75 | 6.44 | 0.352 | 27.68 |
| DOGE | 7.6 | 0.04 | 7.56 | 5.00 | 42.3 | 0.1774 |
| SHIB | 6 | 0.03 | 5.97 | 3.94 | 164.383 | 0.0000365 |
| MATIC | 4.5 | 0.02 | 4.48 | 2.96 | 1.7 | 2.5508 |
| CRO | 4.5 | 0.02 | 4.48 | 2.96 | 7.8 | 0.5706 |
| LTC | 4.52 | 0.02 | 4.5 | 2.97 | 0.02859375 | 157.29 |
| UNI | 4.52 | 0.02 | 4.5 | 2.97 | 0.259222 | 17.35 |
| LINK | 4.52 | 0.02 | 4.5 | 2.97 | 0.21 | 21.15 |
| ALGO | 5 | 0.02 | 4.98 | 3.29 | 3 | 1.4004 |
| BCH | 4.52 | 0.02 | 4.5 | 2.97 | 0.01015652 | 442.82 |
| XLM | 5 | 0.02 | 4.98 | 3.29 | 16 | 0.276242 |
| ATOM | 4.5 | 0.01 | 4.49 | 2.97 | 0.1 | 27.45 |
| AXS | 4.52 | 0.02 | 4.5 | 2.97 | 0.043 | 102.3 |
| TOTAL | 152.04 | 0.66 | 151.37 |
All purchases were completed around noon on December 23rd, 2021. In the table above you will find all the necessary information to track this portfolio.
What Will I Do Next?
As I mentioned at the beginning of this post, I will post regular monthly updates on the performance of this portfolio. I’m planning to compare it to other hypothetical portfolios, like a weighted with the top 20 coins, and maybe even one following the top 100 coins.
I might move the coins to a self-custody hardware wallet. My wallet of choice right now is the Ledger Nano S. It is simple and easy to use. However, I’m planning to upgrade to a Ledger Nano X at some point in the future. It includes Bluetooth to securely connect to my phone.
If you are interested in following along, bookmark this website and also add your email to the mailing list. I plan to send out emails when I post new content and to share useful information and tips that I find.
Don’t worry, I don’t intend to spam your inbox. Currently, I’m aiming at posting once a week, but if the frequency changes I will let you know.
I hope this article was interesting and that you will check the next ones.
I would like to hear from other crypto investors and their portfolios. Do you have a strategy or plan for 2022? Which coins are you investing in? Share your thoughts in the comment section!