Analyzing a16z's encryption investment portfolio: What are the returns of the top 25 currencies?

Original author: Ren & Heinrich

Andreessen Horowitz (a16z) is one of the world’s most famous venture capital firms. Their portfolio includes approximately 50 cryptocurrencies. In this analysis, I want to see if, as a retail investor, you can make a profit in 2024 by trading in the same coins as a16z and selling them after about 5 months.

Assume some conditions first

• You, as an individual investor, engage in copy trading (i.e., investing in the same cryptocurrency as a16z and selling it approximately 5 months later).

• Invest $100 in each of the top 25 coins in the a16z portfolio by Market Cap (totaling $2500).

• Investment period: From January 1, 2024 to June 6, 2024 (157 days).

In-depth Analysis

With these conditions in place, let’s take a look at how a16z’s investment portfolio has performed since the beginning of the year.

The X-axis displays the time trend, and the Y-axis displays the profit or loss percentage. A value of 200 means that the corresponding Cryptocurrency has risen by 100% based on its original value.

As we can see, the situation is complicated.

On the one hand, we have seen some cryptocurrencies perform well in price in the past few months, such as:

• Arweave (AR): +323%

• Goldfinch（GFI）：+ 157%

• Ethereum (ETH): + 63%

On the other hand, there are also many prices falling, for example:

• XRP (XRP): -17%

• Optimism（OP）：-38%

• ApeCoin（APE）: -22%

Overall, 11 out of the top 25 Cryptocurrencies showed a net rise in value. After subtracting the losses from other coins’ price drops, the total sales price is $3158.82. Therefore, the total profit ($3158.82 - $2500) is $658.82, with a Return on Investment (ROI) of 26.35%, which is not bad.

In fact, people who only invest in BTC or Ethereum during the same period will get greater profits.

Obviously, blindly replicating the investment portfolio of Anderson Horowitz is not the most ideal choice.

How to obtain more long profit?

If there are other ways to increase profits by copying the top 25 coins in the a16z Cryptocurrency portfolio, let’s take a closer look at the timeline.

When Bitcoin started to pump in early March, the entire cryptocurrency market also experienced a strong pumping trend, but not all coins had the same rate of increase.

The chart compares the strong-performing and mediocre-performing currencies in the a16z portfolio (displaying the average rise or fall of currencies with positive or negative gains at the beginning of June).

We can see that the strong-performing currencies had significantly higher gains than the mediocre-performing currencies (average +104% on March 13th versus average +27% on March 13th) and were able to maintain this advantage in the long term.

Therefore, the strength of the increase is one of the indicators of whether it will perform well in the coming months.

Just a reminder, time is crucial in Cryptocurrency investment.

Just as Anderson Horowitz won’t hold their coins forever, you should always follow the trend and seize selling opportunities when copying trades, keeping only the most promising coins in your investment portfolio.

What does it mean to perform “strong” and “mediocre”?

This enlarged chart displays all currencies that have increased in value until early June in green, and the rest in red.

As of March 13, we can see that these strong-performing currencies have risen by at least 40%, while the mediocre ones have almost all fallen below this level.

Although no fixed rules can be derived from it, it shows that if you sell half of the underperforming Cryptocurrency in your portfolio around mid-March, you will make a substantial profit in June.

However, this does not rule out the possibility that these mediocre performers may have better performances later.

a16z’s Crypto portfolio demonstrates market diversity and challenges, investors should be cautious when replicating its strategy, always paying attention to market trends and the performance of individual currencies.

In this rapidly changing field, timely buying and selling decisions are crucial to seize opportunities in the Fluctuation and achieve sustainable investment returns.

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