Rebalancing vs Buying in Top 10: $1,043,902 Profits!



Short answer: Not too concerned about tax implications (though it will be some headache when filing).

Rebalancing will of course incur short term capital gains vs. a HODL strategy where you hold for at least 1 year. Short term capital gains are taxed as ordinary income.

Three scenarios (using 2018 as an example):

  1. Crypto portfolio gains value in 2018 - You will incur taxes on most of your cumulative gains (except for amounts you didn’t sell by the end of the year).
  2. Crypto portfolio is flat in 2018 - No taxes incurred from rebalancing (individual gains and losses are offset)
  3. Crypto portfolio loses value in 2018 - You report the losses and apply against any other capital gain you have (or carry forward the loss to next year)

For a HODL strategy, if you bought today and held for over 1 year, your cryptos are taxes at long term capital gains (15% for most people).

I believe 2018 will continue the volatile swings we’ve seen in the crypto markets, so the rebalancing strategy (i.e. sell high/buy low) that incurs short term capital gains will likely outperform a HODL strategy in which you don’t sell any of your cryptos for over a year.

Now… from a headache standpoint in doing taxes… the number of transactions to report from rebalancing strategy could be large. I’m planning to use so hopefully it does most of the work for me.


i just bought $15K worth of top 10 coins. I’m looking at the graphs scratching my head that im buying at ATH & massively oversold. I really really don’t want to buy XRP, ADA (both ATH massively oversold RSI) and BCH (obv reasons). But I’m doing this for pure investment and curiosity where trading disregarding graphs and emotions can lead me over a full year.

See you 3 Apr 2018 for rebalance.

this is going to be a fun ride!


Hey Seth,

The only question I got is did you sell any off your coins, or pull out of BTC during huge BTC rallies and or dips?


I readjusted the Quarterly sheet on Sethlouey’s excel sheet, only showing top 5 coins, guess what? $2 million, this will significantly reduce transaction fees. I believed the fluctuation between the top 5 -10 and there was five coins that dropped out of the top 10 created these results. I’m not sure if the 4th quarter produced bias results because every coin received crazy exposure that sent them surging. So instead of the 4th, i looked at the 3rd quarter, only considering the top 5, it had an increase of 50k compare to investing in the top 10.
I did the same for the Monthly sheet and but the results did not change that much for each month including the last quarter of the year.

So what is the best method?
Whats the best way to do this strategy?
1 - transfer Eth/btc to Binance (and buy some BNB to get cheaper transaction fee?)
2 - buy top 10 coins.
3 - buy two new ledgers or a number wallets- mew, toast-wallet,electrum wallet and maybe one more for other altcoins.
4 - $1.7million profit.
5 - do some taxes
6 - lambo

any ideas?


Can you share the new ammended spreadsheet.


I just deleted the coins in between top 5 -10 and readjusted the initial amount between 5 coins instead of 10 for each month.


One caution for 2018: Top 10 will re-organize, you may be in the water, but you may miss some waves.


This is only data for 2017. I did not use this tactic, but am now.


I’m for 10 on 10. Need to look at the top 5 maybe next move. I’m sticking to plan for now. Thanks for the tips, when it works out, I’ve got you covered at Franklin’s for some Q!


It’s pretty freaking awesome to make an annual salary in a few months. Then double it, and again!


100% with you. In my opinion, this should be one of very few reasons for entering crypto. Financial freedom and securing your yourself for the future. Lamborghinis and whatnot are nice, but they’re not a priority. Have to get the infrastructure set before making any big leaps. This is also what sets the pub apart from the rest, posts like this.


Going for quarterly and also doing cost average for top10/20 every 3 months at the same time might be a good idea too. The gains can be bigger :slight_smile:


anyone tried calculating the top 20 ? how does it comepare to top 10 ?


tron just overtook dash in top 10 lol


Hello Crypto Comrades. Happy Crypto New Year to all of you!

So, alts have had a remarkable couple of weeks. Gutted my funds haven’t come through early enough to start my Top10 rebalancing exercise yet! I’m now ready to smash in another load of money, on what will hopefully be a bit of a Friday dip tomorrow. Top10 spread but also top 5 privacy coin spread and a small market cap project spread are all in my plans.

So my thinking is now, given the a) lovely alt run b) BTC’s recent steadiness and c) the very low btc market dominance (which historically always corrects back to 50-65%), whether it would in fact be better to smash my money into BTC, wait for its inevitable run/alt dip and then use that BTC to buy into the alts I’m after? Basically, still do Top10 rebalancing but start and end it a little later, hopefully with a slightly bigger balance than otherwise.

What do you all think?


That’s what I am thinking at the moment as well. If BTC starts to correct its market dominance by going bullish, then we’ll be seeing these alts dipping. So there might be a better buy opportunity in the future. But then again, what if we keep seeing higher and higher prices? On Monday and Tuesday, I thought I shouldn’t buy when they’re all at ATH and wait for Friday. Now the prices are higher than Tuesday’s ATH :joy: and it feels like even if they’ll be dipping on Friday, the dip price will still be higher than current price.


The point of this data is to invest and rebalance without FOMO. As @peter says, “look at the big picture”.


Where do y’all keep your coins between rebalancing? Exchange, wallet, hardware wallet?


Well said! The big picture is what matters after a year. That was actually the second thing I was thinking of after what I wrote :joy:

Looking at the current altcoin rally, I also think 2018 will be a year where we will see parabolic increase in everything. Thanks to traders, it is so easy for altcoin prices to go extremely high for what they actually offer. I mean literally some coins out there have gigantic market cap just because there are zibillions of each coin in circulation and there are traders who agree to buy and sell them for a dollar or more instead of few cents.


I’m in on the experiment! Started my transfer and still shut out of Bittrex but I’ll make it work with the ones I can.Great contributions here guys and gals!!!