Copy Trading a16z: 2024 Performance Analysis
Insights and Returns from the Top 25 Coins in the Andreessen Horowitz Crypto Portfolio
Andreessen Horowitz (a16z) is one of the best-known venture capital firms in the world. Their portfolio contains around 50 cryptocurrencies. In this analysis, I want to find out whether you can profit in 2024 as a retail investor if you do copy trading, i.e. invest in the same coins as a16z and sell them after about 5 months.
To do this, I assumed the following conditions:
- An investment of $100 each in the top 25 coins by market cap in the a16z portfolio ($2,500 in total).
- Investment period: January 1, 2024, to June 6, 2024 (157 days).
Let’s get to the juicy stuff immediately and analyze how well a16z’s portfolio has performed since the beginning of the year.
The X-axis shows the time course, the Y-axis the gains or losses in percent. A value of 200 means that the respective cryptocurrency has increased by 100 percent based on the original value, etc.
As we can see, the picture is mixed. On the one hand, we see some cryptocurrencies that have shown good price development in recent months. These include:
- Arweave (AR): +323%
- Goldfinch (GFI): +157%
- Ethereum (ETH): +63%
On the other hand, there are also many losers such as:
- XRP (XRP): -17%
- Optimism (OP): -38%
- ApeCoin (APE): -22%
Overall, 11 of the cryptocurrencies in the top 25 show a net growth. If you subtract the losses due to the price decreases of the other coins, the total selling price is $3,158.82. The total profit ($3,158.82 - $2,500) is therefore $658.82. A return on investment (ROI) of 26.35%. Not bad.
On the other hand, anyone who had simply invested their money in Bitcoin or Ethereum during the same period would have come out with a significantly larger profit.
Uncompromising copy trading the Andreessen Horowitz portfolio would therefore not have been the ideal choice.
So what else could you have done to increase your profits with the top 25 coins of a16z’s crypto investment portfolio? Let’s take a closer look at the timeline.
Unsurprisingly, the crypto market as a whole saw a strong upward movement when Bitcoin began to gain in the first weeks of March.
But not all coins gained equally. The chart compares the
strong and weak performers from the a16z portfolio (for this I took the average increases of the coins that had positive or negative overall developments by the beginning of June). We can see that the strong performers recorded significantly stronger increases at the beginning of March (on March 13th an average of +104%) than the weak performers (on March 13th an average of +27%) and were able to maintain these in the long term.
The strength of the increases was therefore a good indicator of the performance in the coming months. But what exactly is a strong or weak performance in this context?
This zoomed-in chart shows all coins with positive net growth by the beginning of June in green, and all others in red.
As of March 13, we see that these strong performers had an increase of at least 40%, while the weak performers, with one exception, were all below that.
Now, no fixed rule can be derived from this. But it shows that if you had sold the weaker-performing half of the cryptocurrencies in the portfolio around mid-March, you would have made a big plus in June. However, this does not exclude the possibility that these weak performers will do better at a later date.
Once again, it becomes clear that timing is essential when investing in crypto. Just as Andreessen Horowitz does not hold their coins forever, you should always keep an eye on trends when copy trading and seize selling opportunities when they arise, so that you only have the most promising coins in your portfolio.
