In this past month, we have seen a big crypto market crash. Indeed, April has not been a good month for the cryptocurrency markets, or the stock market either. Some of the cryptocurrencies I have in my “ETF” dropped 30% or more. Meanwhile, some companies suffered sharp losses (Amazon lost over 14% in a single day, on April 29th).
I will give a summary of crypto market movements, at least as it pertains to my self-directed “ETF”.
Disclaimers
As I always mention in my posts, what I share here is not financial advice of any kind. I’m also not a licensed advisor. All you read here is just my experience in the markets.
Price Performance
My crypto portfolio saw its lowest point during the month of April. However, it was an unexpected turn of events, at least based on how things were going by the end of March.
During the last week of March, crypto markets were on their way up. You can see on the chart below that it was basically an uninterrupted climb from the lows of March 13th until the peak on April 3rd. Since then, it’s been a ride all the way down.
My 2022 crypto portfolio is down 28% for the month of April, and down over 42% since inception.
It seems that uncertainty or fear of higher interest rates caused investors to get spooked and start selling. The first big drop happened on April 6th. Then the next one was on April 12th, and finally, after a period of relative stability, things crashed again after April 22nd.
Correlation With The Stock Market
It makes sense to me that investors are running away from volatile assets now that safer alternatives like I-Bonds exist. The concerning takeaway for me is that crypto markets are too tightly intertwined with traditional stock markets. This means that I need to keep looking for other assets to balance my portfolios.
Moreover, most coins, at least the big ones such as those in my 2022 portfolio, are highly correlated to each other. I created a correlation matrix heatmap showing this effect:
As you can see, for the majority of them, the correlation is very high. The most notable exceptions are WLUNA/LUNA and to a lesser degree ATOM. Those two coins have the clearest value when compared to the others.
I don’t plan to do anything with this information for now. However, I may consider holding more WLUNA/LUNA in the future, just to offset the other coins if another crypto market crash occurs. I should probably analyze correlations during these isolated periods as well.
New Portfolio Allocations
With all these market movements, the weighting of each coin in the portfolio has changed. Here is a chart showing each coin and its percent allocation to the overall portfolio:
To me, the most notable fact is that Dogecoin (DOGE) moved up several spots in the list as compared to last month. In fact, DOGE is now in the top 5 coins in the portfolio.
In my last update, I also mentioned that I wanted to get some insights into the rough distribution of the account based on the top 10 and lower 10 coins. As a result, I created a pie chart to illustrate this:
As you can quickly see, the top 5 coins in the portfolio; BTC, ETH, BNB, WLUNA, and DOGE, represent around 50% of the total value. The next 5, ADA, DOT, SOL, AVAX, and SHIB, represent close to 25%. The remaining 10 coins account for the last 25%. So in total, the top 10 coins take up 75% of the “ETF” and the bottom 10 take 25%.
Summary Information
I already mentioned some of this information above, but here is the summary of the portfolio performance for the past month and since inception (I apologize for all the extra code; I’ll clean it up for the next post).
With a 28% drop, April is officially the worst-performing period for my young portfolio so far. But hey, it can always get worse. We’ll see what happens.
The total performance is really bad. In a single month, it went from -21.93% to -42%. I would not be surprised if another crypto market crash were to happen. It seems that money is moving to safer assets.
Final Thoughts and Plans
I don’t think I have a lot more to say about this past month. Hopefully, things stabilize, but I won’t be counting on it. Right now, the 2022 Crypto portfolio is in its worst state since it was created.
In terms of these reports, starting next month I will begin tracking crypto performance against the US stock market. I may also include other markets or niches. Let me know in the comments if you have any suggestions.
How is your portfolio doing this year? Let me know in the comments. I think it would be interesting to hear from others about this. Moreover, if you want to check the Jupyter notebook I used to generate these charts, look here. In the future, I will organize it better.
If you are looking to start your own crypto portfolio, here is my Coinbase referral link. If you open an account with them and buy at least $100 worth of crypto, you and I will both get $10 of free Bitcoin.
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