It’s often said that the essence of wisdom in investing is diversification. In the world of cryptocurrencies, holding different coins in a single portfolio, often called a “bag”, can be a strategic move. In this article, we compare two hypothetical portfolios (Bag A and Bag B), each comprising three distinct cryptocurrencies, and predict their performances over a span of 3 years. Let’s take a look at this cryptocurrency ROI prediction article.
Bag A contains Cardano (ADA), Ripple (XRP), and Bitcoin (BTC), while Bag B is made up of Ethereum (ETH), Shiba Inu (SHIB), and Litecoin (LTC).
Before we jump into future predictions, let’s look at the current market prices:
- ADA: $0.286
- XRP: $0.4673
- BTC: $30,132.95
- ETH: $1,861.39
- SHIB: $0.000007625
- LTC: $93.75
We will use these prices as the basis for our calculations.
Cryptocurrency ROI Prediction: Predicting the Unpredictable
Before we proceed, it’s vital to remember that cryptocurrency markets are notoriously volatile, and predicting specific values can be challenging. The calculations provided here are hypothetical, based on past performance and current market trends, and should not be considered as financial advice.
Bag A: ADA, XRP, BTC – An In-depth Calculation
Let’s break down each cryptocurrency in Bag A with a starting investment of $1,000:
Cardano (ADA): At a current price of $0.286 per ADA, an investment of $1,000 would buy approximately 3496.50 ADA. A predicted growth of 300% over three years would increase the price to around $1.144 per ADA. This would give us a future value of 3496.50 ADA * $1.144 = $4,000.
Ripple (XRP): A $1,000 investment at the current XRP price of $0.4673 would buy approximately 2139.54 XRP. With a predicted growth of 200%, the price would rise to approximately $1.4019 per XRP. This gives us a future value of 2139.54 XRP * $1.4019 = $3,000.
Bitcoin (BTC): At the current BTC price of $30,132.95, a $1,000 investment would give us approximately 0.0332 BTC. A predicted growth of 100% would raise the price to around $60,265.90 per BTC. This results in a future value of 0.0332 BTC * $60,265.90 = $2,000.
The total future value of Bag A would be $4,000 (ADA) + $3,000 (XRP) + $2,000 (BTC) = $9,000. Subtracting the initial investment of $3,000 gives an overall profit of $6,000, which represents a 200% return on the original investment.
Bag B: ETH, SHIB, LTC – A Detailed Breakdown
Let’s conduct similar calculations for Bag B with a starting investment of $1,000 in each coin:
Ethereum (ETH): A $1,000 investment at the current price of $1,861.39 per ETH would give us approximately 0.537 ETH. With a predicted 200% increase, the price could rise to about $5,584.17 per ETH. This gives us a future value of 0.537 ETH * $5,584.17 = $3,000.
Shiba Inu (SHIB): At the current price of $0.000007625 per SHIB, $1,000 would buy approximately 131,062,500,000 SHIB. If SHIB were to increase by 500% over three years, the price would be around $0.00004575 per SHIB. This gives a future value of 131,062,500,000 SHIB * $0.00004575 = $6,000.
Litecoin (LTC): A $1,000 investment at the current LTC price of $93.75 would give us approximately 10.67 LTC. If LTC price were to increase by 100% to approximately $187.50, this would give us a future value of 10.67 LTC * $187.50 = $2,000.
The total future value of Bag B would be $3,000 (ETH) + $6,000 (SHIB) + $2,000 (LTC) = $11,000. Subtracting the initial investment of $3,000 gives an overall profit of $8,000. This represents a 267% return on the initial investment.
Comparative ROI Analysis – Detailed Calculations and Cryptocurrency ROI Prediction
ROI is calculated as follows:
ROI = (Future Value – Initial Investment) / Initial Investment * 100%
Bag A:
For ADA, XRP, and BTC, we have future values of $4,000, $3,000, and $2,000 respectively. Each of these started with an initial investment of $1,000.
- ADA ROI: (4,000 – 1,000) / 1,000 * 100% = 300%
- XRP ROI: (3,000 – 1,000) / 1,000 * 100% = 200%
- BTC ROI: (2,000 – 1,000) / 1,000 * 100% = 100%
The overall ROI for Bag A is an average of the individual ROIs:
(300% + 200% + 100%) / 3 = 200%
Bag B:
For ETH, SHIB, and LTC, we have future values of $3,000, $6,000, and $2,000 respectively. Each of these started with an initial investment of $1,000.
- ETH ROI: (3,000 – 1,000) / 1,000 * 100% = 200%
- SHIB ROI: (6,000 – 1,000) / 1,000 * 100% = 500%
- LTC ROI: (2,000 – 1,000) / 1,000 * 100% = 100%
The overall ROI for Bag B is an average of the individual ROIs:
(200% + 500% + 100%) / 3 = 267%
Given these assumptions, Bag B provides a greater average ROI over the 3 year period, but it’s also important to remember that these predictions are highly speculative and don’t account for the high volatility and risk associated with cryptocurrency investments.
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Conclusion
Based on these hypothetical predictions, Bag B (ETH, SHIB, LTC) appears to have a higher return potential over three years. However, it’s essential to remember that cryptocurrency investments are inherently risky and unpredictable. Careful analysis, diversified investments, and understanding the risk tolerance are key to navigating the crypto seas. Always do your own research or consult with a financial advisor before making investment decisions.